MBA SEMESTER III

ASSIGNMENT Set 1

Name Registration No. Learning Centre

: Esha Sengupta : 571117742 : Gariahat

Learning Centre Code : 01626 Course Subject Subject Code Semester Date of submission : MBA(HR) : Legal Aspects of Business : MB0051 : IIIrd : 7/2/2013

Ans. The term law is used in many senses: you may speak of the law of physics, mathematics, science, or the laws of the football or health. In its widest sense, law means any rule of conduct, standard or pattern, to which actions are required to conform; if not conformed, sanctions are imposed. When we speak of the law of a State, we use the term law in a special and strict sense. Significance of Business law are as follows: 1. Law is a body of rules. These rules prescribe the conduct, standard or pattern to which actions of the persons in the state are required to conform. However, all rules of conduct do not become law in the strict sense. We resort to various kinds of rules to guide our lives. 2. Law is for the guidance or conduct of persons both human and artificial. The law is not made just for the sake of making it. The rules embodied in the law are made, so as to ensure that actions of the persons in the society conform to some predetermined standard or pattern. This is necessary so as to ensure continuance of the society. No doubt, if citizens are self-enlightened or self-controlled, disputes may be minimized, but will not be eliminated. Rules are, therefore, drawn up to ensure that members of the society may live and work together in an orderly manner. Therefore, if the rules embodied in the law are broken, compulsion is used to enforce obedience, and certain consequences ensue. 3. Law is imposed. Law is imposed on the members to bring about an order in the group, enabling it to continue and prosper. It is not something which may or may not be obeyed at the sweet will of the members of society. If you cannot impose a rule it is better not to have it. Thus, law is made obligatory on the members of the society. 4. Law is enforced by the executive. Obviously, unless a law is enforced it ceases to be a law and those persons subject to it will regard it as dead. 5. The state. A state is a territorial division, with people therein subject to a uniform system of law administered by some authority of the state. Thus, law presupposes a state. 6. Content of law. The law is a living thing and changes throughout the course of history. Law responds to public opinion and changes accordingly. Law can never be static. Therefore, amendments are made in different laws from time to time. For example, the Monopolistic and Restrictive Trade Practices Act, 1969, has been subjected to many amendments since its inception in 1969. 7. Two basic ideas involved in law. The two basic ideas involved in any law are: (i) to maintain some form of social order in a group and (ii) to compel members of the group to be within that order. These basic ideas underlie formulation of any rules for the members of a group. A

Q1. Discuss the nature and significance of business law.

group is created because first, there is a social instinct in the people to live together and secondly, it helps them in self-preservation. Rules are made by the members of the group, so that the group doesnt whither away. 8. Law is made to serve some purpose which may be social, economic or political. Some examples of law in the widest sense of the term. Law in its widest sense may include: (i) Moral rules or etiquettes, the non-observance of which may lead to public ridicule, (ii) Law of the Land the non-observance of which may lead to arrest, imprisonment, fines, etc., (iii) Rules of international law, the nonobservance of which may lead to social boycott, trade-sanctions, cold war, hot war, proxy war, etc. ------------------------------------------------------------------------------------------------------------------------------

Q2. What is Partnership? Briefly state special features of a partnership on the basis of which its existence can be determined under the Indian Partnership Act?
Ans. A partnership is defined as 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. 1. Partnership is an association of two or more than two persons. There must be at least two persons who should join together to constitute a partnership, because one person cannot become a partner with himself. These persons must be natural persons having legal capacity to contract. Thus, a company (which is an artificial person) cannot be a partner. Similarly, a partnership firm cannot be a partner of another partnership firm. As regards maximum number of partners in a partnership firm, Sec.11 of the Companies Act, 1956, puts the limit at 10 in case of banking business and 20 in case of any other business. 2. Partnership must be the result of an agreement between two or more persons. An agreement presupposes a minimum number of two persons. As mentioned above, a partnership to arise, at least two persons must make an agreement. Partnership is the result of an agreement between two or more persons (who are known as partners after the partnership comes into existence). 3. The agreement must be to carry on some business. The term business includes every trade, occupation or profession [Sec.2(b)]. Though the word business generally conveys the idea of numerous transactions, a person may become a partner with another

even in a particular adventure or undertaking (Sec.8). Unless the person joins for the purpose of carrying on a business, it will not amount to partnership. 4. The agreement must be to share profits of the business. The joint carrying on of a business alone is not enough; there must be an agreement to share profits arising from the business. Unless otherwise so agreed, sharing of profits also involves sharing of losses. But whereas the sharing of profits is an essential element of partnership, sharing of losses is not. Formation of partnerships All the essential elements of a valid contract must be present in a partnership as it is based on an agreement. Duration of partnership The duration of partnership may or may not be fixed. It may be constituted even for a particular adventure. Partnership at will In accordance with Sec.7, a partnership is called a partnership at will where; (i) it is not constituted for a fixed period of time and (ii) there is no provision made as to the determination of partnership in any other way. Particular partnership In accordance with Sec.8 a particular partnership is one which is formed for a particular adventure or a particular undertaking. Such a partnership is usually dissolved on the completion of the adventure or undertaking. Limited partnership In this type of partnership, the liability of certain partners is limited to the amount of capital which they have agreed to contribute to the business. In a limited partnership, there will be at least one general partner whose liability is unlimited and one or more special partners whose liability is limited. -----------------------------------------------------------------------------------------------------------------------------

Q3. Examine the rights of a consumer enshrined under the Consumer Protection Act, 1986.
Ans. For the first time in the history of consumer legislation in India, the Consumer Protection Act, 1986 extended a statutory recognition to the rights of consumers. Sec.6 of the Act recognizes the following six

rights of consumers: 1. Right to safety, i.e., the right to be protected against the marketing of goods and services which are hazardous to life and property. 2. Right to be informed, i.e., the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumer against unfair trade practices. 3. Right to choose: It means right to be assured, wherever possible, access to a variety of goods and services at competitive prices. In case of monopolies, say, railways, telephones, etc., it means right to be assured of satisfactory quality and service at a fair price. 4. Right to be heard, i.e., the consumers interests will receive due consideration at appropriate forums. It also includes right to be represented in various forums formed to consider the consumers welfare. 5. Right to seek redressal: It means the right to seek redressal against unfair practices or restrictive trade practices or unscrupulous exploitation of consumers. It also includes right to fair settlement of the genuine grievances of the consumers. 6. Right to consumer education: It means the right to acquire the knowledge and skill to be an informed consumer.

Q4. What do you mean by bailment? What are the requisites of a contract of bailment? Explain.

Ans. Bailment is defined as the delivery of goods by one to another person for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of person delivering them. The person delivering the goods is called the bailor and the person to whom the goods are delivered is called the bailee. From the definition of bailment, the following characteristics should be noted: 1. Delivery of goods. The essence of bailment is delivery of goods by one person to another for some temporary purpose. Delivery of goods may, however, be actual or constructive. Actual delivery may be made by handing over goods to the bailee. Constructive delivery may be made by doing something which has the effect of putting the goods in the possession of the intended bailee or any person authorised to hold them on his behalf (Sec.149). 2. Bailment is based on a contract. In bailment, the delivery of goods is upon a contract that when the purpose is accomplished, they shall be returned to the bailor. For example, where a watch is delivered to a watch repairer for repair, it is agreed that it will be

returned, after repair, on the receipt of the agreed or reasonable charges. 3. Return of goods in specie. The goods are delivered for some purpose and it is agreed that the specific goods shall be returned. Return of specific goods (in specie) is an essential characteristic of bailment. Thus, where an equivalent and not the same is agreed to be returned, there is no bailment. 4. Ownership of goods. In a bailment, it is only the possession of goods which is transferred and not the ownership thereof, therefore the person delivering the possession of goods need not be the owner; his business is to transfer possession and not ownership. -----------------------------------------------------------------------------------------------------------------------Q5. Name the instruments which are recognized as negotiable instruments by the Negotiable Instruments Act, 1881. Ans. An Instrument as referred to in the Act is a legally recognized written document, whereby rights are created in favour of one and obligations are created on the part of another. The word negotiable means transferable from one person to another either by mere delivery or by endorsement and delivery, to enable the transferee to get a title in the instrument. An instrument may possess the characteristics of negotiability either by statute or by usage. Promissory note, bill of exchange and cheque are negotiable instruments by statute as they are so recognized by Sec.13. There are certain instruments which are recognized as negotiable instruments by usage. Thus, bank notes, bank drafts, share warrants, bearer debentures, dividend warrants, scripts and treasury bills are negotiable by usage. An instrument is called negotiable if it possesses the following features: 1. Freely transferable. Transferability may be by (a) delivery, or (b) by endorsement and delivery. 2. Holders title free from defects. The term negotiability means that not only is the instrument transferable by endorsement and/or delivery, but that its holder in due course acquires a good title notwithstanding any defects in a previous holders title. A holder in due course is one who receives the instrument for value and without any notice as to the defect in the title of the transferor. 3. The holder can sue in his own name. Another feature of a negotiable instrument is that its holder in due course can sue on the instrument in his own name. 4. A negotiable instrument can be transferred infinitum, i.e., can be transferred any number of times, till its maturity. 5. A negotiable instrument is subject to certain presumptions. An instrument, which does not have these characteristics, is not

negotiable, but is assignable, i.e., the transferee takes it subject to all equities and liabilities of the transferor. ------------------------------------------------------------------------------------------------------------------------

Q6. a) Write short note on Intellectual property right. b) A leaves a cow in the custody of B to be taken care of. The cow gives birth to a calf. Who will take the calf and why?

Ans. a) Intellectual property(IP) is a legal concept which refers to creations of mind for which exclusive rights are recognized common types of intellectual property rights include copyright, trademarks & patents. Trademark: A trademark is a recognizable sign, design or expression which identifies products or services of a particular source from those of others. The trademark, owner can be individual, business organization. Patent: It means a patent for any invention granted under this Act. Copyright: The term copyright means the exclusive right, by virtue of, and subject to the provision of the Act: (a) in the case of literary, dramatic or musical work, not being a computer programme (i) to reproduce the work in any material form including the storing of it in any medium by electronic means; (ii) to issue copies of the work to the public not being copies already in circulation; (iii) to perform the work in public, or communicate it to the public; (iv) to make any cinematograph film or sound recording in respect of the work; (v) to make any translation of the work; (vi) to make any adaptation of the work; (vii) to do, in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in (i) to (vi); (b) in the case of computer programme (i) to do any of the acts specified in clause (a) above; (ii) to sell or give on hire, or offer for sale or hire any copy of the computer programme, regardless of whether such copy has been sold or given on hire on earlier occasions; (c) in the case of an artistic work (i) to reproduce the work in any material form including depiction in three dimensions of a two dimensional work or in two dimensions of a three dimensional work; (ii) to communicate the work to the public; (iii) to issue copies of the work to the public not being copies already in circulation; (iv) to include the work in any cinematograph film; (v) to make any adaptation of the work; (vi) to do in relation to an adaptation of the work any of the acts specified in relation to the work in (i) to (iv)

above; (d) in the case of a cinematograph film (i) to make a copy of the film, including a photograph of any image forming part thereof; (ii) to sell or give on hire; or offer for sale or hire, any copy of the film, regardless of whether such copy has been sold or given on hire on earlier occasions; (iii) to communicate the film to the public. (e) In the case of a sound recording (i) to make any other sound recording embodying it; (ii) to sell or give on hire, or offer for sale or hire, any copy of the sound recording regardless of whether such copy has been sold or given on hire on earlier occasions; (iii) to communicate the sound recording to the public. b)A leaves a cow in the custody of B to be taken care of. The cow gives birth to a calf. The calf will be taken by A because A only gave the custody for taking care of the cow to B but A still remains the owner of the cow so all the products obtained from the cow belongs to A. So, accordingly A should take the calf.