MB0051: Legal Aspects of Business ASSIGNMENT- Set 1 1. What are the sources of law? Explain.

The main sources of modern Indian Law, as administered by Indian courts, may be divided into two broad categories: (i) Primary sources and, (ii) Secondary sourc es. Primary sources of Indian law The primary sources of Indian law are: (a) customs, (b) judicial precedents (sta re decisis), (c) statutes and (d) personal law. Customary law Customs have played an important role in ma ing the law and therefore is also n own as customary law. Customary Law, in the words of Keeton, may be defined as thos e rules of human action, established by usage and regarded as legally binding by those to whom the rules are applicable, which are adopted by the courts and app lied as sources of law because they are generally followed by the political soci ety as a whole or by some part of it. In simple words, it is the uniformity of con duct of all persons under li e circumstances. It is a generally observed course o f conduct by people on a particular matter. When a particular course of conduct is followed again and again, it becomes a custom. Judicial precedents are an important source of law Judicial precedents are another important source of law. It is based on the prin ciple that a rule of law which has been settled by a series of decisions general ly should be binding on the court and should be followed in similar cases. These rules of law are nown as judicial precedents. However, only such decisions whi ch lay down some new rules or principles are treated as judicial precedents. Thu s, were there is a settled rule of law, it is the duty of the judges to follow t he same; they cannot substitute their opinions for the established rule of law. This is nown as the doctrine of stare decision. The literal meaning of this phr ase is stand by the decision. Statute an important source of law The statutes or the statutory law or the legislation is the main source of law. This law is created by legislation such as Parliament. In India, the Constitutio n empowers the Parliament and state legislatures to promulgate law for the guida nce or conduct of persons to whom the statute is, expressly or by implication, m ade applicable. It is sometimes called enacted law as it is brought into existence by getting Acts passed by the legislative body. It is called Statute Law becaus e it is the writ of the state and is in written form (jus scriptum). Personal law Many times, a point of issue between the parties to a dispute is not covered by any statute or custom. In such cases, the courts are required to apply the perso nal law of the parties. Thus in certain matters, we follow the personal laws of Hindus, Mohammedan and Christians. Secondary sources of Indian law The secondary sources of Indian Law are English Law and Justice, Equity and Good Conscience. English law The chief sources of English Law are: (i) the Common Law (ii) Equity, (iii) The law Merchant and (iv) The Statute Law 1. Common law. This source consists of all those unwritten legal doctrines embod

ying customs and traditions developed over centuries by the English courts. Thus , the common law is found in the collected cases of the various courts of law an d is sometimes nown as case law. 2. Equity. The literal meaning of the term equity is natural justice. The developmen t of equity as a source of law occurred due to rigours and hardships of the Comm on Law. Therefore, in its technical and narrower sense, equity means a body of leg al doctrines and rules emanating from the administrations of justice, developed to enlarge, supplement or override a narrow rigid system of existing law of the land. However, li e the common law, the equity is unwritten and is a supplement to common law as a source of law. 3. Statute law. The Statute law consists of the law passed by the Parliament and therefore, is written law. The authority of parliament is supreme but is subjec t to natural limitations and those laid down by the Constitution. It can pass an y law it pleases and can override its own previous Acts and the decisions of the courts. Statute law, therefore, is superior to and can override any rule of Com mon Law or equity. 4. The law merchant or lex mercatoria. It is another important source of law and is based to a great extent on customs and usages prevalent among merchants and traders of the middle ages. Its evolution li e that of equity can be traced to u nsuitability of Common Law so far as the commercial transactions were concerned. The Common Law was found to be unsatisfactory in dealing with disputes between merchants. The merchants, therefore, developed certain rules based upon customs and usages to govern their mercantile transactions. These rules were nown as Le x Mercatoria or the Law Merchant.

2. What is meant by contract? Explain about quasi contracts A contract is an agreement, enforceable by law, made between at least two par ties by which rights are acquired by one and obligations are created on the part of another. If the party, which had agreed to do something, fails to do that, then the other party has a remedy. Example: A Roadways sells a tic et on 1 March to Mi e for the journey from Delhi to Kanpur on 10th March. The Roadways is under an obligation to ta e Mi e from D elhi to Kanpur on 10th March. In case the Roadways fails to fulfill its promise, Mi e has a remedy against it. Thus, Mi e has a right against the Roadways to be ta en from Delhi to Kanpur on 10th March. A corresponding duty is imposed on th e Roadways. As there is a breach of promise by the promisor, the other party to the contract has a legal remedy. Quasi contract is a situation in which law imposes upon one person, on grounds of natural justice, an obligation similar to that which arises from a true contrac t, although no contract, express or implied, has in fact been entered into by th em. Cases which are treated as quasi contracts 1. Claim for necessaries supplied to a person incapable of contracting or o n his account. 2. Reimbursement to a person paying money due by another in payment of whic h he is interested.

3.

What are the rights of consumer under consumer protection act? Its a unique legislations in India to offer protection to consumers. The main objective of this Act is to provide better protection to the consumers

 The Act intends to provide simple, speedy and inexpensive redressal to the consu mers grievances Right Right Right Right Right Right to to to to to to safety be informed choose be heard, see redressal consumer education

5. What is partnership? Explain the nature of partnership under law of partnershi p. Partnership is a time-honoured form of business organisation. The law relating to partnership in India deals with the Indian Partnership Act, 1932. A contract of partnership is a special contract. The relationship between persons who have agreed to share profits of a business carried on by all, or by any of them acting for all. Elements of Partnership Partnership is an association of two or more than two persons. Partnership must be the result of an agreement between two or more persons. The agreement must be to carry on some business. The agreement must be to share profits of the business. Nature of Partnership Partnership should contain all the essential elements of a valid contract as it is based on an agreement while constituting a partnership. The following points must be ept in mind: A minor may be admitted to be benefits of partnership. No consideration is required to create partnership. The partnership agreement may be express (i.e., oral or writing) or implied. Partnership agreement must be in writing. An alien friend can enter into partnership. Partnership at will Particular partnership Limited partnership

6. Write a note on the following on Copy Right Act. The Copyright Act, 1957 contains law relating to Copyright. It came into force on January 21, 1958.

Wor s in which copyright subsists Copyright subsists throughout India in the following classes of wor : (a) original, literary, dramatic, musical and artistic wor s; (b) cinematograph films; and (c) sound recordings. The term copyright means the exclusive right, by virtue of, and subject to the pro vision of the Act: In the case of literary, dramatic or musical wor , not being a computer programm e In the case of computer programme

ASSIGNMENT- Set 2 1) Explain different modes of discharge of contracts. A contract is said to be discharged when the rights and obligation created by it come to end. The contract act 1872 provides various ways in which a contract ma y be discharge or terminated. 2. Modes of discharge of contract: Following are different modes in which a contract may be discharged. (I) Performance: Performance is a common mode of discharge of a contract. It is a common of disch arge when the parties to a contract perform their share of promises the contract is discharged. (a) Types of performance: Performance may be of two types. (i) Actual performance: When each party to a contract fulfill the obligations arising under the contract according to the terms and conditions of the contract, it is called actual perf ormance. (ii) Offer of performance: An offer to perform is now as Tender or Offer of performance when the promisor off ers to perform the obligation but the other party refuses accept, the offer is e quivalent to performance. Essentials of a valid offer of performance. (i) It must be unconditional . (ii) It must be made at proper time. (iii) It must be made at proper place. (iv) It must be made by a person who is able to perform the promise. (v) It must be made to the promise or his agent. (vi) An offer, of performance made to stranger is invalid. (vii) In case of tender of money exact amount should be tendered. (II) By agreement: A contract can also be discharged by the fresh agreement between the parties. (a) Ways to terminate the contract: Following are different ways to discharge a contract by agreement. (i) Novation:

In the case of an artistic wor In the case of a cinematograph film In the case of a sound recording

When the parties to the contract agree to substitute a new contract for a contra ct, that is called Novation. Kinds of Novation: (a) A Novation involving the change of parties. (b) A Novation involving substitution of a new contract in the place of old cont ract. (ii) Rescission: When all or some of the terms of contract are cancelled the contract is said to be rescined. Modes of rescission: Rescission may occur. (i) By mutual consent of the parties. (ii) When are party fails to reform his contractual obligation, the other party may rescind the contract. (iii) Alteration: When one or more of the contract is altered by actual consent of the parties, th e contract is said to be altered. (iv) Release of waiver: Waiver means the intentional abandonment of a right, which a person is entitled to under a contract. (v) Remission: Remission of performance means that a promise can discharge the promisor also wi thout a new agreement but not only without consideration. Creditors may accept l esser amount than what is due in discharge of the whole debt. (vi) Merger: It ta es place when an inferior right accuring under a contract merger into a su perior right accuring to the same party or some other contract. (III) By impossibility: Impossibility discharge the parties. If the act becomes impossible after the for mation of contract, the contract is rendered void. (a) Categories of impossibility: Following are categories of impossibility. (i) Initial impossibility: Initial impossibility is that which is nown or un nown to the parties. (ii) Subsequent impossibility: Some times a contract, is capable of being performed when entered into. But some subsequent event renders the performance impossible. (b) Factors causing impossibility of performance of contract: The following are the factors causing impossible of the performance of the contr act. (i) Destruction of subject matter. (ii) Failure of ultimate purpose (iii) Death (iv) Personal incapacity (v) Change of law (vi) Declaration of war (IV) Discharge by laps of time: A contract may be discharge by laps of time. The contract should be performed wi th in a reasonable time. If a contract is not discharge with in a specified time , the contract is discharued. (V) By operation of law: A contract may be discharged by operation of law. Ways of termination: Following are different ways of discharge under operation of law. (a) Insolvency: Where the court declares a person as insolvent, the rights and liabilities are t ransferred to officer nown as receiver so contract is discharged. (b) By unauthorized: If the terms of the contract, written on a document are materially altered by on e party, without the consent of the other party the contract is discharged and c

2) Distinguish between a contract of guarantee and a contract of indemnity Both contracts may be distinguished in the following cases : 1. Difference in Meaning :Contract of indemnity : In the contract of indemnity one person promises to save the other from any loss. Contract of guarantee : In the contract of guarantee one person gives guarantee for the performance of the contract. 2. Difference in the Number of Parties :Contract of indemnity : Under the contract of indemnity there are two parties. Contract of guarantee : Under the contract of guarantee there are three parties. 3. Difference in the Liability :Contract of indemnity : Under indemnity contract the basic liability falls on th e indemnifies. Contract of guarantee : In case of guarantee contract surety has the secondary l iability. 4. Difference in the Number Of Contracts :Contract of indemnity : Under the indemnity contract there is one contract only. Contract of guarantee : Under the contract of guarantee there must be at least t hree contracts.

an not be enforced. (VI) By breach of contract: A contract may be discharged by breach if one of the parties to a contract brea the promise, the injured party has not only a right damages but it is also disc harge from performing his part of the contract. (i) Actual breach: It occurs when a party fails to perform a contract, where performance is due. (ii) Anticipatory breach: An anticipatory breach contract occurs before the time fixed for performance has arrived. It may happed in two ways. (iii) Express breach: In express breach a party to contract communicates to the other party, his inten tion not be perform the contract on his part. (iv) Implied breach: In implied breach party to the contract does not act. Which ma es the performanc e of the contract impossible, 3. Conclusion: To conclusion it can be said that, when the rights and obligations arising out o f a contract are extinguished the contract is said to be discharged. The contrac tual tie may be loosend and contract may be terminated under different modes und er contract act.

5. Difference in the Nature of Interest :Contract of indemnity : In case of indemnity contract, indemnifies has the inter est in earning commission and premium. Contract of guarantee : In case of guarantor he has no any other interest except guarantee.

6. Difference in the Right of Claim :Contract of indemnity : The indemnifies cannot sue the third party. Contract of guarantee : Guarantor is entitled to proceed against the principal d ebtor in his own name. If he has paid the debt.

7. Difference in the Performance of Contract :Contract of indemnity : Contract of indemnity depends upon the possibility of ri s or loss. Contract of guarantee : In case of guarantee there is an existing debt or duty p erformance about which guarantee is given. 3) Briefly state special features of a partnership on the basis of which its exi stence can be determined under the Indian Partnership Act?