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Semester 2: CORE IV BUSINESS LAW
Elements of Contract Indian Contract Act 1872 Definition of Contract, Essentials of Valid Contract, Classification of Contract, Offer and Acceptance Consideration Capacity to Contract Free Consent - Legality of Object Contingent Contracts Void Contract
Elements of Contract Indian Contract Act 1872
Definition of Contract
A contract is a legally enforceable agreement between two or more parties that creates obligations that are binding on the parties.
Essentials of Valid Contract
1. Offer and Acceptance 2. Intention to Create Legal Relations 3. Lawful Consideration 4. Capacity to Contract 5. Free Consent 6. Lawful Object
Classification of Contract
1. Based on Enforceability: Valid, Void, Voidable 2. Based on Formation: Express, Implied 3. Based on Performance: Executed, Executory 4. Based on Subject Matter: Unilateral, Bilateral
Offer and Acceptance
An offer is a proposal made by one party to another, indicating a willingness to enter into a contract under specified terms. Acceptance is the unqualified agreement to the terms of the offer.
Consideration
Consideration refers to something of value that is exchanged between the parties, which is essential for a contract to be enforceable.
Capacity to Contract
Parties entering into a contract must have the legal capacity to do so, including age, mental competence, and not being disqualified by law.
Free Consent
Consent is said to be free when it is not obtained through coercion, undue influence, misrepresentation, or fraud.
Legality of Object
The object of the contract must be lawful, meaning it should not be illegal, immoral or against public policy.
Contingent Contracts
These are contracts whose performance is dependent on the occurrence of a specific event or condition.
Void Contract
A void contract is one that is not enforceable by law from the moment it is created, often due to illegal terms or lack of essential elements.
Performance of Contract Meaning of Performance, Offer to Perform, Devolution of Joint liabilities Rights, Time and Place of Performance, Reciprocal Promises, Assignment of Contracts - Remedies for Breach of contract - Termination and Discharge of Contract - Quasi Contract
CORE IV BUSINESS LAW
B.Com Cooperation
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BUSINESS LAW
Performance of Contract
Meaning of Performance
Performance in a contract refers to the fulfillment of obligations as agreed upon by the parties. It is essential for the execution of the contract and includes both the act of performing and the timing of such performance.
Offer to Perform
An offer to perform is a proposal by one party to fulfill their contractual obligations. This must be communicated to the other party and must be made in good faith.
Devolution of Joint Liabilities
When two or more parties are liable under a contract, liabilities can devolve in cases such as death or insolvency. Joint liabilities must be discharged collectively unless otherwise specified.
Rights
Parties to a contract have certain rights regarding the performance of their obligations. They may seek performance, damages, or rescission based on the contract's terms.
Time and Place of Performance
Contracts usually specify a time and place for performance. Time is often of the essence, and failure to perform at the specified place or time can result in breach.
Reciprocal Promises
Reciprocal promises occur when two parties make mutual commitments to perform acts under a contract. Legal provisions govern the performance of such promises.
Assignment of Contracts
Assignment of contracts refers to the transfer of contractual obligations or rights from one party to another. The original party retains certain liabilities unless explicitly released.
Remedies for Breach of Contract
Various remedies exist for breaches, including damages, specific performance, and rescission. The choice of remedy depends on the nature of the breach.
Termination and Discharge of Contract
Contracts may be terminated through mutual consent, breach, or conditions specified in the contract. Discharge of contract refers to the release from contractual obligations.
Quasi Contract
A quasi-contract is not an actual contract but a legal obligation imposed by the court to prevent unjust enrichment. It arises when one party benefits at the expense of another.
Contract of Indemnity and Guarantee Contract of Indemnity and Contract of Guarantee - Extent of Suretys Liability, Kinds of Guarantee, Rights of Surety, Discharge of Surety
Contract of Indemnity and Guarantee
Definition and Nature
A contract of indemnity involves a promise to compensate a loss or damage incurred by another party. In contrast, a contract of guarantee involves a promise to answer for the debt or default of another party.
Extent of Surety's Liability
The liability of a surety is secondary and contingent upon the principal debtor's default. The surety is only liable to the extent agreed upon in the guarantee.
Kinds of Guarantee
1. Conditional Guarantee: Liability arises on the occurrence of certain conditions. 2. Unconditional Guarantee: Liability exists without conditions. 3. Continuing Guarantee: Covers a series of transactions over time.
Rights of Surety
1. Right of subrogation: Surety can step into the shoes of the creditor after fulfilling the obligation. 2. Right to indemnity: Surety can seek compensation from the principal debtor. 3. Right to contribution: In case of multiple sureties, each is entitled to claim contribution from others.
Discharge of Surety
Surety's obligation can be discharged in various ways such as: 1. By performance of the contract. 2. By release or discharge of the principal debtor. 3. By alteration of the terms without consent. 4. By revocation of the guarantee.
Bailment and Pledge Bailment and Pledge Bailment Concept Essentials - Classification of Bailments, Duties and Rights of Bailor and Bailee Law of Pledge Meaning Essentials of Valid Pledge, Pledge and Lien, Rights of Pawner and Pawnee.
Bailment and Pledge
Concept of Bailment
Bailment is a legal relationship involving the transfer of possession of personal property from one party (bailor) to another (bailee) for a specific purpose, with the understanding that the property will be returned after its purpose is fulfilled.
Classification of Bailments
Bailments can be classified based on the benefit derived: 1. For the benefit of the bailor (gratuitous bailment). 2. For the benefit of the bailee. 3. For mutual benefit.
Duties and Rights of Bailor
The bailor has the right to receive the property back after the purpose is served, to be informed of any defects in the property, and to receive compensation for damages caused by the bailee's negligence. Duties include disclosing known defects and compensating the bailee for expenses incurred during bailment.
Duties and Rights of Bailee
The bailee must take care of the property, not use it for unauthorized purposes, and return it in its original condition. Rights include receiving compensation for expenses and claiming a lien for unpaid services.
Law of Pledge
A pledge is a specific type of bailment used as security for a debt. The bailor becomes the pledgor while the bailee is referred to as the pledgee.
Essentials of Valid Pledge
To be valid, a pledge must involve a contract, the transfer of possession, and an intention to create a security interest. The property pledged must be capable of being pledged.
Pledge and Lien
A pledge gives the pledgee a possessory lien on the pledged property, allowing them to retain it until the debt is paid. A lien, however, can exist without possession.
Rights of Pawner and Pawnee
The pawner (pledgor) has the right to redeem the property upon payment of the debt, while the pawnee (pledgee) has the right to recover the debt from the pawned property and to sell the property in case of default.
Sale of Goods Act 1930 Definition of Contract of Sale Formation - Essentials of Contract of Sale - Conditions and Warranties - Transfer of Property Contracts involving Sea Routes - Sale by Non-owners - Rights and duties of buyer - Rights of an Unpaid Seller
Sale of Goods Act 1930
Definition of Contract of Sale
A contract of sale is an agreement between the seller and buyer in which the seller transfers or agrees to transfer the ownership of goods to the buyer for a price. It involves both the sale and the agreement to sell.
Formation - Essentials of Contract of Sale
The essentials for the formation of a contract of sale include the following: 1. Offer and Acceptance: Clear communication between both parties. 2. Competent Parties: Both parties must have the legal capacity to contract. 3. Consideration: A valid price must be established for the goods. 4. Lawful Object: The purpose of the contract must be legal. 5. Certainty: The terms of the agreement need to be clear.
Conditions and Warranties
Conditions are essential terms of the contract that go to the root of the agreement. Warranties are secondary terms that are not fundamental to the contract. Breach of a condition allows for termination of the contract, whereas breach of a warranty allows for claims for damages only.
Transfer of Property
In the context of the Sale of Goods Act, transfer of property refers to the transition of ownership of goods from the seller to the buyer. This can occur at different points in time based on the type of contract, whether it is a specific or general goods sale.
Contracts Involving Sea Routes
Contracts for the sale of goods transported via sea routes are subject to specific regulations. The rights and obligations of parties in maritime contracts must comply with both the Sale of Goods Act and relevant maritime laws.
Sale by Non-owners
A non-owner cannot transfer ownership of goods unless authorized by the owner. Such sales are governed by principles including estoppel and the rights of the buyer in good faith.
Rights and Duties of Buyer
Buyers in a contract of sale have specific rights, including the right to receive goods as described and to reject defective goods. Duties include paying the price and accepting the goods within a reasonable time.
Rights of an Unpaid Seller
An unpaid seller has several rights despite not receiving payment, such as the right to retain possession of the goods, the right to sue for price, and certain rights relating to the goods in transit including lien rights.
