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1) The Company has a separate legal existence.

The owners are different from the people who


manage the business. The management is however headed by owners who are elected directors. The
company is separate from the persons who own it. The company cannot be held responsible for any
misdeeds of the members.
The important features of a company are:

1. An artificial person: The company enjoys all the rights as a citizen of a country would enjoy. It 'can own properties, enter into contracts etc.
2. Legal formation: The formation of a Joint Stock Company is governed by the rules and regulations laid down in the Companies Act, 1956.
3. Voluntary organisation: It is formed by members voluntarily joining the organisation and contributing money or money's worth for the business.
4. Perpetual succession: Unlike Sole proprietorship and Partnership, the Company has continuous existence. The continuity of the business is not affected by the death, i
up."
5. Limit to liability: The liability of the members of a company is restricted to the extent of the unpaid value of the shares held by him. The personal asset of a share
6. Large capital: A Joint Stock Company can generate huge amount of money towards capital, because the number of persons contributing towards capital are m
7. Large scale operation: Since huge amounts are collected as capital, the operation of the business will generally be on a large scale basis.
8. Transferability of shares: The shares of a Joint Stock Company are easily transferable from one person to another, since it is a Public Limited Company. The shares of a P
9. Common seal: The company, being an artificial being, cannot affix its signature on the documents on its own. The common seal is used in place of a signature.

4) The following are the essential elements of a valid contract :


1. Offer and Acceptance. In order to create a valid contract, there must be a
'lawful offer' by one party and 'lawful acceptance' of the same by the other party.
2. Intention to Create Legal Relationship. In case, there is no such intention on
the part of parties, there is no contract. Agreements of social or domestic nature do
not contemplate legal relations.
3.Lawful Consideration. Consideration has been defined in various ways.
According to Blackstone,"Consideration is recompense given by the party
contracting to another." In other words of Pollock, "Consideration is the price for
which the promise of the another is brought."
consideration is known as quid pro-quo or something in return.
4. Capacity of parties. The parties to an agreement must be competent t
contract. If either of the parties does not have the capacity to contract, the contract
is not valid.
According the following persons are incompetent to contract.
(a) Miners,
(b) Persons of unsound mind, and
(c) persons disqualified by law to which they are subject.
5. Free Consent. 'Consent' means the parties must have agreed upon the same
thing in the same sense.

According to Section 14, Consent is said to be free when it is not caused by(1) Coercion, or
(2) Undue influence, or
(3) Fraud, or
(4) Mis-representation, or
(5) Mistake.
An agreement should be made by the free consent of the parties.
6. Lawful Object. The object of an agreement must be valid. Object has nothing to
do with consideration. It means the purpose or design of the contract. Thus, when
one hires a house for use as a gambling house, the object of the contract is to run a
gambling house.
The Object is said to be unlawful if(a) it is forbidden by law;
(b) it is of such nature that if permitted it would defeat the provision of any law;
(c) it is fraudulent;
(d) it involves an injury to the person or property of any other;
(e) the court regards it as immoral or opposed to public policy.
7. Certainity of Meaning. According to Section 29,"Agreement the meaning of
which is not Certain or capable of being made certain are void."
8. Possibility of Performance. If the act is impossible in itself, physically or
legally, if cannot be enforced at law. For example, Mr. A agrees with B to discover
treasure by magic. Such Agreements is not enforceable.
9. Not Declared to be void or Illegal. The agreement though satisfying all the
conditions for a valid contract must not have been expressly declared void by any
law in force in the country. Agreements mentioned in Section 24 to 30 of the Act
have been expressly declared to be void for example agreements in restraint of
trade, marriage, legal proceedings etc.
10. Legal Formalities. An oral Contract is a perfectly valid contract, expect in
those cases where writing, registration etc. is required by some statute. In India
writing is required in cases of sale, mortgage, lease and gift of immovable property,
negotiable instruments; memorandum and articles of association of a company, etc.
6) The different modes of crossing are:
1. General Crossing:
In a general crossing, simply two parallel transverse lines, with or without the words 'not negotiable'
in between, may be drawn. Such a cheque is crossed generally.

The effect of general crossing is that the payment of the cheque will not be made at the counter, it
can be collected only through a banker.
2. Special Crossing:
In a special crossing, the name of a banker with or without the words 'not negotiable' is written on
the cheque. Such a cheque is crossed specially to that banker.
It should be noted that two transverse parallel lines are necessary for a general crossing, whereas for
a special crossing, no such lines are necessary.
The effect to special crossing is that the paying banker will be the amount of the cheque only through
the bank named in the cheque.

Section 138 Dishonour of cheque for insufficiency, etc., of funds in the account. Where
any cheque drawn by a person on an account maintained by him with a banker for payment
of any amount of money to another person from out of that account for the discharge, in
whole or in part, of any debt or other liability, is returned by the bank unpaid, either
because of the amount of money standing to the credit of that account is insufficient to
honour the cheque or that it exceeds the amount arranged to be paid from that account by
an agreement made with that bank, such person shall be deemed to have committed an
offence and shall, without prejudice to any other provisions of this Act, be punished with
imprisonment for 19 [a term which may be extended to two years], or with fine which may
extend to twice the amount of the cheque, or with both: Provided that nothing contained in
this section shall apply unless
(a) the cheque has been presented to the bank within a period of six months from the date
on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand
for the payment of the said amount of money by giving a notice in writing, to the drawer of
the cheque, 20 [within thirty days] of the receipt of information by him from the bank
regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the
payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of
the receipt of the said notice.
CASE Study
1) The point in this case is whether the petitioner has withdrawn the tender before it was
opened in accordance with the conditions of the tender notice. According to the tender
notice, the tenders were to be opened at 3 pm by opening the tender box. But mere opening
of the box was not sufficient. The tender forms were to be scrutinized as to whether they
were valid tenders and successful bidder was to be found out. That process admittedly, was
not gone through and even according to the respondent the sealed covers were not opened
on the given date and were kept back in the box. The opening of the tenders by removing the

salts was postponed because of the interim order of this court. Before the actual process
starts, the petitioner had asked for the return of earnest money. Hence, it is not possible to
accede to the contention of the learned counsel for the respondent. Though the request of
the petitioner did not specifically refer to withdrawal of the tender, still no one would ask for
return of the earnest money unless there is an intention not to participate in the tender. The
respondent had also understood this because of the later reply where the respondent had
clearly stated that the petitioner should participate in the opening of the tenders on the date
to which it was postponed and expressed the inability to return the earnest money. But that
clause comes into operation after the tenders are opened and the highest bidder is declared
and such a declaration can come only after scrutinizing the tenders. In the present case, that
did not take place and the petitioner had asked for return of earnest money stating that he
had no interest in participating in the opening of the tenders.
2) As tender would amount to complete performance, if the offer were carried out,
the requisites of a valid tender are indicated by the requisites of valid performance.
There must be an un-conditional offer to perform, coupled with a manifested ability
to carry out the offer, and a production of the subject-matter of the tender;66 the
amount tendered must not be less than what is due; and if greater, there must be
no demand for a return of the excess.68 The medium of payment must be that
which the contract specifies or in the absence of contractual definition that which
the law has made legal tender;69 the time must be that fixed by the contract or by
law;70 it must not be before maturity; and the hour of the day must be reasonable.
But at the present time in case of a liquidated debt a valid tender may be made
subsequent to the day of maturity by adding legal interest to the amount of the
debt.
3) According to the tender notice, the tenders were to be opened at 3 pm by
opening the tender box. But mere opening of the box was not sufficient. The tender
forms were to be scrutinized as to whether they were valid tenders and successful
bidder was to be found out. That process admittedly, was not gone through and
even according to the respondent the sealed covers were not opened on the given
date and were kept back in the box. The opening of the tenders by removing the
salts was postponed because of the interim order of this court. Before the actual
process starts, the petitioner had asked for the return of earnest money. Hence, it is
not possible to accede to the contention of the learned counsel for the respondent.
Though the request of the petitioner did not specifically refer to withdrawal of the
tender, still no one would ask for return of the earnest money unless there is an
intention not to participate in the tender.
http://www.scribd.com/doc/184153242/ADL-12-BUSINESS-LAW-WITH-CHANGE-2013docx#scribd