Spring 2015

BBA Semester 3
BBA 301: LEGAL AND REGULATORY FRAMEWORK
Q1. Explain the clause related to the acceptance of proposal and the mandatory
conditions attached with it.
As per ICA: A person is said to have made the proposal when he signifies to another his
willingness to do or to abstain from doing anything with a view to obtaining the assent of
that offer to such act or abstinence. The person making the offer is called the proposer or
offerer.
A valid offer must have the following elements:

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i) Intention to enter into a legal relationship.

ii) Clear, certain and unambiguous terms.

iii) A clear offer, not a statement of intention to make an offer.

iv) Should not be an invitation for an offer from someone else.

v) Should be communicated to the concerned person.

vi) Must not contain a clause that assumes automatic acceptance.

ICA states: A proposal is said to be accepted when the person to whom the proposal is
made signifies his assent thereto. A proposal when accepted becomes a promise. The
offeree agrees to be bound by the terms of the offer by accepting it.

Acceptance of offer must fulfil the following conditions:

i) It must be absolute, unqualified and unconditional.

ii) Only the offeree himself or a person authorised by him can accept the offer.
iii) It must be communicated to the offerer within the prescribed or reasonable time
otherwise the offer may lapse.
iv) Acceptance communicated to an unauthorised person is not valid.
v) It must be expressed in some usual and reasonable manner.
vi) It must be made in the manner specified in the offer otherwise the proposer may,
within a reasonable time, insist that it be given in the prescribed manner.
vii) Conditional acceptance or qualified acceptance is no acceptance.
Q2. What are the different ways in which an agency may be formed?
An agency can be formed in the following ways:

a) Agency by express authority

An Agency by express authority is created when the Principal confers express authority on
the agent in spoken or written words. Express authority arises by mutual agreement
between the Principal and Agent. The Agent agrees to act on behalf of the agent and in
doing so he binds the Principal to all the obligations and promises he makes with the third
parties. An Agent is bound by the scope of authority conferred on him by the Principal.
Overstepping that scope is akin to breach of contract.
b) Agency by implied authority

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Implied agency is inferred from the conduct and behaviour of the concerned parties or
circumstances of the case e.g., when a person is appointed in a capacity which carries
agency-like powers, third parties may assume that he has the authority to act on behalf of
the Principal.
c) Agency by Ratification

Agency by ratification comes into existence when a person grants post facto or subsequent
acceptance of an unauthorised act done by another person on his behalf, without any
authority. Such acceptance may be expressed or implied. Post facto ratification grants the
hitherto unauthorised act, the legal status of an Agency and the Principal becomes bound
by the act done by his agent. The Agency is deemed to have come into existence from the
time when the Agent first acted on the Principals behalf.
Essentials of a valid ratification

i) Full knowledge: A person ratifying an act of another must have full knowledge of all the
material facts. Incomplete knowledge would render ratification invalid.

ii) Whole transaction: Principal must ratify the full transaction and not parts thereof.
iii) Damage to third party: An act that is detrimental or damaging to a third party cannot be
ratified.
iv) Act on behalf of another person: The Principal can ratify an act done by an Agent on his
behalf but he cannot ratify an act done by the Agent in his own name.
v) Existence of Principal: Principal must be in existence when the act is done in his name.
vi) Contractual capacity: The Principal must be competent to contract in order to be
competent to ratify the act. A minor cannot ratify a contract even after reaching maturity.
vii) Reasonable time frame: Ratification must be made within a reasonable time otherwise it
will not be binding.
viii) Lawful act: The act to be ratified must be lawful.
ix) Act within the Principals power: A Principal cannot ratify an act which is not within his
power and competence.

x) Communication: Ratification must be communicated to the third party in order to become

binding.
d) Agency By Operation of Law
An agency by operation of law arises when the law grants a person the status of another
persons agent. For example, when a partnership is legally formed, every partner legally
becomes the Agent of other partners.

Q3. A bill may be dishonoured by non-acceptance or by non-payment. Explain

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Q4. Decisions of the members at general meetings are expressed by way of

resolutions. What do you understand by the term resolution here? Explain it with its
kinds.

Q5. FEMA clearly defines the acts that can be termed as offences under its purview.
What are these malpractices which are covered under FEMA act?

Q6. Write short notes on:

a) Copyright
b) Electronic Governance

Remaining answers are available in the full assignments.

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