MB0051 LEGAL ASPECTS OF BUSINESS 1. Distinguish between indemnity and guarantee. A.

The contracts of guarantee are among the most common business contracts and are used for a number of purposes. These are: i)The guarantee is generally made use of to secure loans. Thus, a contract of guarantee is for the security of the creditor. ii)The contracts of guarantee are sometimes called performance bonds. Employers often demand a type of performance bond known as a fidelity bond from employees who handle cash, etc., for the good conduct of the latter. If an employee misappropriates then he surely will have to reimburse the employer. iii)Bail bonds, used in criminal law are a form of contract of guarantee. A bail bond is a device which ensures, that a criminal defendant will appear for trial. If the prisoner does not appear in the court as desired then the bond is fortified. A contract of guarantee is defined as a contract to perform the promise, or discharge the liability of a third person in case of his default. The person who gives the guarantee is called surety; the person for whom the guarantee is given is called the creditor. A contract of guarantee may be either oral or written. In a contract of guarantee, there must be in effect, two contracts, a principal contract between the debtor and the creditor and a secondary contract between the creditor and the surety. In a contract of guarantee there are three parties, the creditor, the principal debtor and the surety. Kinds of guarantee Oral or written guarantee A contract of guarantee may either be in oral or writing(sec.126) though a creditor should always try to put it in writing to avoid any disputes regarding the terms etc. Specific and continuing guarantee A guarantee is a specific guarantee if it is intended to be applicable to a particular debt and thus comes to end on its repayment. A specific guarantee once given is irrevocable. A guarantee which extends to a series of transactions is called continuous guarantee.(sec.129) A guarantee may either be for the whole debt or part of the debt Contract of Indemnity Secs.124 and 125 provide for a contract of indemnity.Sec 124 provides that a contract of indemnity is a contract whereby one party promises to save the other from loss caused to him (the promise) by the conduct of the promisor himself or by the conduct of any other person. A contract of insurance is a glaring example of such type of contracts. A contract of indemnity may arise either by an express promise or operation of law. The contract of indemnity, like any other contract, must have must have all the essentials of a valid contract. There are two parties in a contract of indemnity, the indemnifier and the indemnified. The indemnifier tries to make good the loss of the indemnified (i.e., the promisee) Rights of the Indemnified He is entitled to receive from the promisor: (1) All damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies; (2)All costs of suit which he may have to pay to such third party, provided in bringing or defending the suit (a) he acted under the authority of he indemnifier or (b) if he did not act in of orders of the indemnifier and in such a way as a prudent man who would act in his own case; (3) All sums which may have paid under the terms of any compromise of any such suit. Rights of the Indemnifier The Act makes no mention of the rights of the Indemnifier. However, his rights in such cases are similar to the rights of a surety under sec.141, viz., he becomes entitled to the benefit of all the securities which the creditor has against the principal debtor whether he was aware of them or not. Indemnity requires that the party to be indemnified shall never be called upon to pay. Indemnity is not necessarily given by repayment after payment. The indemnified may compel the indemnifier to place him in a position to meet liability that may cause upon him without waiting until the promise has actually discharged it A contract in which A says to B, if you lend Rs.20 to C, I will see that your money comes back is an indemnity. 1.

On the other hand undertaking in these words, If you lend Rs.20 to C and he does not pay you, I will is a Guarantee. Thus, in a contract of Indemnity, there are only two parties, indemnifier and indemnified, on the other hand, there are 3 parties in case of guarantee, principal debtor, the creditor and the surety. 1. 2. 3. He liability of a promisor is primary and independent in a contract of indemnity. In a contract o f guarantee, the liability of the surety is the secondary, the primary liability being that of the principal debtor. In case of Guarantee, there is an existing debt or obligation, the performance of which is guaranteed by the surety. In case of indemnity, the possibility of any loss happening is a contingency against which the indemnifier undertakes to indemnity. Ion a contract of guarantee, after discharging the debt, the surety is entitled to proceed against the principal debtor in his own name, unless there is an assignment in his favour.

Q.2 What are the remedies for breach of contract. Ans :Remedies for Breach of Contract When someone breaches a contract, the other party is no longer obligated to keep its endof the bargain. From there, that party may proceed in several ways:(i) the other party may urge the breaching party to reconsider the breach;(ii) if it is a contract with a merchant, the other party may get help from consumers associations;(iii) the other party may bring the breaching party to an agency for alternative dispute resolution;(iv) the other party may sue for damages; or (v) the other party may sue for other remedies. Rescission of the contract: When a breach of contract is committed by one party, theother party may treat the contract as rescinded. In such a case the aggrieved party is freed from all his obligations under the contract. Damages (Sec.75):Another relief or remedy available to the promisee in the event of a breach of promise by the promisor is to claim damages or loss arising to him there from. Damages under Sec.75 are awarded according to certain rules as laid down in Secs.73-74.Sec.73 contains three important rules:(i) Compensation as general damages will be awarded only for those losses that directly and naturally result from the breach of the contract. (ii) Compensation for losses indirectly caused by breach may be paid as special damages if the party in breach had knowledge that such losses would also follow from such act of breach.(iii) The aggrieved party is required to take reasonable steps to keep his losses to the minimum. The most common remedy for breach of contracts: The usual remedy for breach of contracts is suit for damages. The main kinds of damages awarded in a contract suit are ordinary damages. This is the amount of money it would take to put the aggrieved party in as good a position as if there had not been a breach of contract. The idea is to compensate the aggrieved party for the loss he has suffered as a result of the breach of the contract. In addition to the rights of a seller against goods provided in Secs.47 to 54, the seller has the following remedies against the buyer personally.(i) suit for price (Sec.55);(ii) damages for non-acceptance of goods (Sec.56);(iii) suit for interest (Sec.56). Suit for price (Sec.55)Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay the price, the seller can sue the buyer for the price of the goods. Where the property in goods has not passed to the buyer, as a rule, theseller cannot file a suit for the price; his only remedy is to claim damages. Suit for damages for non-acceptance (Sec.56)Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance. Where the property in the goods has not passed to the buyer and the price was not payable without passing of property, the seller can only sue for damages and not for the price. The amount of damages is to be determined in accordance with the provisions laid down in Sec.73 of the Indian ContractAct, 1872. Thus, where there is an available market for the goods prima facie, the difference between the market price and the contract price can be recovered. Suit for interest (Sec.61)When under a contract of sale, the seller tenders the goods to the buyer and the buyer wrongfully refuses or neglects to accept and pay the price, the seller has a further right toclaim interest on the amount of the price. In the absence of a contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of the price. Q3. What is the definition of cyber crime? A. Crimes in cyber world are known as cyber crimes. This includes cyber stalking, cyber nuisance, cyber harassment, cyber defamation and the like.India enacted the IT Act in May 2000 and became part of a select group of countries to have put in place cyber laws. IT Act, 2000 provides for punishment to whosoever transmits or publishes or causes to be published or transmitted, any material which is obscene in electronic form with imprisonment for a term which may extend to 2 years and with fine which may extend to Rs.25,000 on first convection and in the event of second convection may extend to 5 years and fine which may extend to Rs.50,000/-. The above provision chiefly aim at curbing the increasing number of child pornography cases and does not encompass other crimes which could have been expressly brought within its ambit such as cyber defamation.

The reluctance on part of companies to report cyber crime is they dont want to get negative publicity or worse get entangled in legal proceedings. Q4.What is the distinction between cheque and bill of exchange? A Bill of Exchange is defined by sec.5 as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a ceratin sum of money only to or to the order of, a certain sum of money only to or to he order of, a ceratin person, or to the bearer of the instrument. Parties to a bill of exchange The parties of bill of exchange are:

The drawer: The person to whom the amount of the bill is payable. The drawee: The person on whom the bill is drawn. Thus, drawee is the person responsible for acceptance and payment of the bill. In the ceratin cases however a stranger may accept the bill on behalf of the drawee. The Payee: The person to whom the amount of bill is payable. It may be the drawer himself or any other person. The Holder: It is the original payee but where the bill has been endorsed, the endorsee. In case of a bearer bill, the bearer or possessor is the holder. The Endorser: It is the person who endorses the bill. The Endorsee: It is the person to whom the bill is negotiated by endorsement. Drawee in case of need. Acceptor for honour. Cheques A cheque is the usual method of withdrawing money from a current account with a banker. Savings bank account are also permitted to be operated by cheques provided certain minimum balance is maintaied. A cheque, in essence, is an order by the customer of the bank directing his banker to pay on demand, the specified amount, to or to the order of the person named therin or to the bearer. Sec.6 defines a cheque. It provides that a cheque is a bill of exchange drawn on a specified banker and nit expressed to be payable otherwise than on demand and it includes the elecronic image of a truncated cheque and a cheque in the electronic form. A cheque in the electronic form means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature and assymetric crypto system. Requisites of a Cheque: The requisites of a cheque are : 1. 2. 3. 4. 5. 6. 7. Written Instrument Unconditional Order On a specified banker only A certain sum of money Payee to be certain Payable on demand Dating of cheques

Q5. What do you mean by patent?Describe the procedure for obtaining a patent. PATENT: A patent for any invention granted under the patent act. The Patents Act, 1970 extends to the whole of India. The objective is to protect the intellectual property rights of a person to whom the patent has been granted. The Act describes the procedure for grant of patent and protects the rights his rights against infringement. The Act came into force from 21st September, 1970. The 1970 Act was ammended in 1999 and 2002 to meet Indias obligations under the Agreement of Trade related Aspects of Intellectual Property Rights (TRIPs) which forms part of the areement establishing the World Trade Organisation (WTO). The amndments finally focused on the obligations which came into force from 1st January 1995 and obligations which came into force st from 1 January 2000.

A patent application can be made by (a) any person claiming to be the true and first inventor of the invention; or (b) any person being the asignee of the person claiming to be the true and first inventor in respect of the right to make such application, or (c) the legal representative of any deceased person, who immediately before his death was entitled to make such an application. The patent applications may be made by any of the above persons either alone or jointly with any other person. Form of application (Sec.7) Every application for a patent shall be for one invention only. The application is to be made in the prescribed form and is to be filed in the patent office. Information and undertaking regarding foreign applications (Sec.8) The Act makes special provisions for patent applications. Every foreign application shall be accompanied by a statement setting out detailed particulars of such application. The foreign required to give an undertaking that he would keep the contrlooer informed in writing of the development in any patent application filed outside India. Provisional and complete specification (Sec.9) Where an application for patent is accompanied by a provisional specification, a complete specification shall be filed within 12 months from date of filing of the application. If the complete application is not filed, the application shall be deemed to be abandoned. Contents of Specification (Sec.10) A description of the invention is called the specification. It should describe the invention and begin with a title sufficiently indicating the subject matter to which the invention relates.

patent act is details and

Q6. Describe the main features of the Consumer Protection Act, 1986. A. The Consumer Protection Act, 1986 recognizes the following six rights of the 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 the right to be assured, wherever possible, access to a variety of goods and services at competitive prices. 4. Right to be heard: The consumers interest 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. 6. Right to consumer education: It means the right to acquire the knowledge and skill to be an informed consumer.

Master of Business Administration - MBA Semester III MB0051 Legal Aspects of Business - 4 Credits Assignment Set- 2 (60 Marks) Question 1: What are the situations which cannot be referred to arbitration? Answer: Arbitration law is a process that involves the assistance of one or more neutral parties known as arbitrators. Arbitrators are charged with hearing evidence from numerous involved parties in a dispute, and their main duty is to issue an award deciding who gets what in order to resolve the situation. In some instances of arbitration law, an arbitrator may also issue an opinion in conjunction with the award, which is designed to explain the award and the reasoning that led to it. Arbitration law and mediation law are two different processes and should not be confused. T he a w a r d a n d t h e o p i n i o n ar e n o t c ap a b l e of bei ng r ev i ewe d by a c ou rt , a nd t her e i s no availability for appeal. The purpose of arbitration law is to serve as a substitution to a trial and review of the decision by a trial court. Subject matter of arbitration: Any commercial matter including an action in tort if it arises out of or relates to a contract can be r ef er r ed t o a r b i t r a t i o n . Ho w ev e r , p u bl i c p o li c y wou l d not p er mi t ma t r i m oni a l ma t t er s, criminal proceedings, insolvency matters anti-competition matters or commercial court matters to be referred to arbitration. Employment contracts also cannot be referred to arbitration but director - company disputes are abatable (as there is no master servant relationship here)5.Generally, matters covered by statutory reliefs through statutory tribunals would be non-abatable. A r b i t r at i o n i s a n Alt er na t i v e Di s p ut e R es ol u t i on p ro c es s wher eby a p er son c h o s en a s a n arbitrator settles disputes between parties. Arbitration is similar to a court trial, with several exceptions: The arbitrator makes the decision called an "arbitration award The arbitration does not take place in a courtroom

The arbitration award is binding. With rare exceptions, there is no right to appeal Arbitration is not a matter of public record. It is private and confidential There is no court reporter or written transcripts Lawyers generally prepare their cases in an extremely limited manner T h e r u l es o f ev i d en c e ar e r el a x ed so t ha t t he pa rt i es ha v e a br oa de r sc o p e, mor e expanded opportunity to tell their stories to present their cases With very few exceptions, it is much less expensive than legal litigation An arbitration time frame is substantially less than that of litigation and going to trial No jury. The Arbitrator(s) maintain neutrality and conflicts of interests Generally, all paperwork and evidence presented are destroyed after the Arbitration The arbitration and arbitration award does not have to adhere to Judicial Case precedentnor formality of traditional court proceedings In India, Arbitration is one of the most effective and trusted proceedings in regard toprivate dispute settlement are guided by the Arbitration & Conciliation Act, 1996. Kind of matters cannot be referred for arbitration: As per general practice, matters involving moral questions or questions of public law cannot beresolved by arbitration. For instance, the following matters are not referred to arbitration: Matrimonial matters Guardianship of a minor or any other person under disability Testamentary matters Insolvency, proceedings Criminal proceedings Questions relating to charity or charitable trusts Matters relating to anti-trust or competition law Dissolution or winding up of a company Indian Arbitration Act follows the guideline of: The Geneva Convention on the Execution of Foreign Arbitral Awards, 1927 T h e New Yo r k C o nv e n t i o n o f 1 9 5 8 on t he R ec og n i t i on a nd Enfor c e me nt of For ei g n Arbitral Awards The Geneva Protocol on Arbitration Clauses of 1923 Question 2: What is the role of a Conciliator? Answer:Conciliation:Conciliation is a process in which the parties to a dispute, with the assistance of a neutral thirdparty (the conciliator), identify the disputed issues, develop options, consider alternatives andendeavour to reach an agreement.The conciliator may have an advisory role on the content of the dispute or the outcome of itsresolution, but not a determinative role.The conciliator may advise on or determine the process of conciliation whereby resolution isattempted, and may make suggestions for terms of settlement, give expert advice on likelysettlement terms, and may actively encourage the participants to reach an agreement.In order to understand what Parliament meant by Conciliation, we have necessarily to refer tothe functions of a Conciliator as visualized by Part III of the 1996 Act. It is true, section 62 of the said Act deals with reference to Conciliation by agreement of parties but sec. 89 permitsthe Court to refer a dispute for conciliation even where parties do not consent, provided theCourt thinks that the case is one fit for conciliation. This makes no difference as to the meaningof conciliation under sec. 89 because; it says that once a reference is made to a conciliator,the 1996 Act would apply. Thus the meaning of conciliation as can be gathered from the 1996Act has to be read into sec. 89 of the Code of Civil Procedure. The 1996 Act is, it may be noted,based on the UNCITRAL Rules for conciliation. Role of conciliator: The conciliator shall assist the parties in an independent and impartial manner in theirattempt to reach an amicable settlement of their dispute. The conciliator shall be guided by principles of objectivity, fairness and justice, givingconsideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, includingany previous business practices between the parties. T h e c o n c i l i a t or ma y c o n du c t t h e c onc i l i a t i on pr oc eed i ng s i n su c h a ma n ner a s he considers appropriate, taking into account the circumstances of the case, the wishes theparties may express, including any request by a party that the conciliator hear oralstatements, and the need for a speedy settlement of the dispute. The conciliator may, at any stage of the conciliation proceedings, make proposals for aset t l e m en t of t he di sp u t e. S u c h p r op o s a l s n ee d n ot b e i n wr i t i ng a nd nee d not be accompanied by a statement of the masons therefore. Conciliators do not: Make decisions for disputing parties Make judgments about who is right, who is wrong or what the outcome of the disputeshould be. Tell people what to do Make rulings Force parties to participate in the conciliation process.

Question 3: What are the unfair trade practices under the MRTP Act?Answer:THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 - OBJECTIVESAND POLICY: The Monopolies and Restrictive Trade Practices Commission has been constituted under Section5(1) of the MRTP Act, 1969. The Commission is empowered to enquire into Monopolistic orRestrictive Trade Practices upon a reference from the Central Government or upon its ownknowledge or information. The MRTP Act also provides for appointment of a Director General of Investigation and Registration for making investigations for the purpose of enquiries by theMRTP Commission and for maintenance of register of agreements relating to restrictive tradepractices.T h e M R T P C o m m i s s i o n r e c e i v e s c o m p l a i n t s b o t h f r o m r e g i s t e r e d c o n s u m e r a n d t r a d e associations and also from individuals. Complaints regarding Restrictive Trade Practices orUnfair Trade Practices from an association are required to be referred to the Director General of Investigation and Registration for conducting preliminary investigation. The Commission canalso order a preliminary investigation by the Director General of Investigation and Registrationwhen a reference on a restrictive trade practice is received from the Central/State Government,or when Commission's own knowledge warrants a preliminary investigation. Enquiries arei ns t i t ut ed by t he C ommi s si on a ft er t he Di r ec t or Gen er a l of I n v es t i g a t i o n a n d Reg i s t r at i o n c o m p l e t es p r el i m i na r y i nv est i g a t i on a nd su bmi t s a n a pp l i c a t i on t o t h e C o mmi s s i o n f or a nenquiry. Unfair Trade Practices: An unfair trade practice means a trade practice, which, for the purpose of promoting any sale,use or supply of any goods or services, adopts unfair method, or unfair or deceptive practice. 1)False Representation: The practice of making any oral or written statement or representation which: Falsely suggests that the goods are of a particular standard quality, quantity, grade,composition, style or model; Falsely suggests that the services are of a particular standard, quantity or grade; Falsely suggests any re-built, second-hand renovated, reconditioned or old goods asnew goods; R ep r es en t s t h a t t h e g o od s or s er v i c es hav e sp onsor s hi p , a pp rov a l , p er for ma nc e , characteristics, accessories, uses or benefits which they do not have; Represents that the seller or the supplier has a sponsorship or approval or affiliationwhich he does not have; Makes a false or misleading representation concerning the need for, or the usefulnessof, any goods or services; Gives any warranty or guarantee of the performance, efficacy or length of life of thegoods, that is not based on an adequate or proper test; Makes to the public a representation in the form that purports to bewarranty or guarantee of the goods or services, a p r o m i s e t o r e p l a c e , m a i n t a i n o r r e p a i r t h e g o o d s u n t i l i t h a s a c h i e v e d a specified result,If such representation is materially misleading or there is no reasonable prospect thatsuch warranty, guarantee or promise will be fulfilled Materially misleads about the prices at which such goods or services are available in themarket; or G i v es f a l s e o r mi s l e a d i n g f a c t s d i s p ar a g i n g t he g oods, ser v i c es or t r a de of a not he r person. 2)False Offer Of Bargain Price :Wh e r e a n a d v er t i s e men t i s p u b l i s h ed i n a newsp a p er or ot her w i se, wher eby goods or services are offered at a bargain price when in fact there is no intention that the same maybe offered at that price, for a reasonable period or reasonable quantity, it shall amount toan unfair trade practice.The bargain price, for this purpose means: the price stated in the advertisement in such manner as suggests that it is lesser thanthe ordinary price, or The price which any person coming across the advertisement would believe to be betterthan the price at which such goods are ordinarily sold. 3)Free Gifts Offer And Prize Scheme :The unfair trade practices under this category are: Offering any gifts, prizes or other items along with the goods when the real intention isdifferent, or Creating impression that something is being offered free along with the goods, when infact the price is wholly or partly covered by the price of the article sold, or Offering some prizes to the buyers by the conduct of any contest, lottery or game of chance or skill, with real intention to promote sales or business. 4)Non-Compliance Of Prescribed Standards :Any sale or supply of goods, for use by consumers, knowing or having reason to believethat the goods do not comply with the standards prescribed by some competent authority,in relation to their performance, composition, contents, design, construction, finishing orpacking, as are necessary to prevent or reduce the risk of injury to the person using suchgoods, shall amount to an unfair trade practice. 5)Hoarding, Destruction, Etc.:

Any practice that permits the hoarding or destruction of goods, or refusal to sell the goodsor provide any services, with an intention to raise the cost of those or other similar goodsor services, shall be an unfair trade practice. 6)Inquiry Into Unfair Trade Practices :The Commission may inquire into any unfair trade practice: Up o n r ec ei v i n g a c o m p l a i n t fr om a ny t r a de a ss oc i a t i on, c onsu m er or a r eg i st er e d consumer association, or Upon reference made to it by the Central Government or State Government Upon an application to it by the Director General or Upon its own knowledge or information. Relief Available :After making an inquiry into the unfair trade practices if the Commission is of the opinion thatthe practice is prejudicial to the pubic interest, or to the interest of any consumer it may directthat? The practice shall be discontinued or shall not be repeated; The agreement relating thereto shall be void in respect of such unfair trade practice orshall stand modified. Any information, statement or advertisement relating to such unfair trade practice shallbe disclosed, issued or published as may be specified The Commission may permit the party to carry on any trade practice to take steps toensure that it is no longer prejudicial to the public interest or to the interest of theconsumer.However no order shall be made in respect a trade practice which is expressly authorized byany law in force.The Commission is empowered to direct publication of corrective advertisement and disclosureof additional information while passing orders relating to unfair trade practices. Question 4: What are essentials of a valid offer? Answer:Offer:A proposal is an expression of will or intention to do or not to do something. It is also called an"offer". It is one of the essential elements of an agreement. It is the very basis of the contract.It becomes a promise when it accepted. Section 2 (a) of the Contract Act defines the proposala s " wh en one p er s on si g ni f i es t o a not he r hi s w i l l i n g n es s t o d o o r t o a b st a i n fr o m doi ng anything, with a view to obtaining the assent of that other, to such act or abstinence, he is saidto make a proposal". The person making the proposal is called the proposer or offer or thep r o mi s o r . T h e p er s o n t o w hom t he pr op osa l i s ma de i s c a l l e d t he off er e e or p r o mi s e e . For example; Sunil offers to sell his car to Padmaja for Rs. 50000. This is a proposal. Sunil isthe offeror and Padmaja is the offeree. An offer may be express or implied. An offer which is expressed by words, written or spoken, iscalled an express offer. An offer which is expressed by conduct is called an implied offer. Anoff er ma y b e p o s i t i v e o r n eg a t i v e. I t ma y b e i n t he for m of a st a t em ent or a qu est i on. for example; Sridhar says to Radhika that he will sell his scooter to her for Rs.20000. This is anexpress offer. The Karnataka State Road Transport Corporation runs omnibuses on various routes to carrypassengers at the scheduled fares. This is an implied offer by KSRTC.The offer must be made in order to create legal relations otherwise there will be an agreement.If an offer does not give rise to legal obligations between the parties it is not a valid offer in theeye of law. In business transactions there is a presumption that the parties propose to makelegal relationships. For example a person invite to another person to diner if the other persona c c ep t s t he i nv i t a t i on t hen i t i s not a ny l eg a l ag re em ent b et w e en t h e p a r t i es i t i s s o c i a l agreement.An offer must be definite and clear. If the terms of an offer are not definite and clear it cannotb e c a l l ed a v a l i d off er . If su c h off er i s a c c ep t ed i t c a n not cr ea t e a bi n di ng c o n t r a ct . Anagreement to agree in future is not a contract because the terms of an agreement are notc l ea r . A p er s o n h a s t w o mo t o r b i k es. He off er s t o a not her p er son t o sel l hi s one bi k e for a certain price then it is not a legal and valid offer because there is an ambiguity in the offer thatwhi c h mot or c y c l e t h e p er s o n wa n t s t o s e l l . T her e i s a di f fer e nc e bet w ee n t he off er a ndinvitation of offer. Sometime people offer the invitation for the sale. Essentials of a valid offer: A valid offer must intend to create legal relations. It must not be a casual statement. If theoffer is not intended to create legal relationship, it is not an offer in the eyes of law e.g.Sunil invites Sridhar to a dinner party and Sridhar accepts the invitation. Sridhar does notturn up at the dinner party. Sunil cannot sue Sridhar for breach of contract as there was nointention to create legal obligation. Hence, an offer to perform social, religious or moralacts without any intention of creating legal relations will not be a valid offer. The terms of an offer must be definite, unambiguous and certain. They must not be looseand vague. A promise to pay an extra Rs. 500 if a particular house proves lucky is toovague to be enforceable. E.g. Sridhar says to Sunil "I will give you some money if youmarry my daughter". This is not an offer which can be accepted because the amount of money to be paid is not certain. An offer may be made to a definite person or to the general public. When offer is made toa definite person or to a special class of persons, it is called "specific offer". When an offeris made to the world at large or public in general, it is called "general offer". A specific offercan be accepted only by that person to whom it has been made and a general offer can beaccepted by any person. E.g. Sunil promises to give Rs.100 to Sridhar, if he brings back hismissing dog. This is a specific offer and can only be accepted by Sridhar. Sunil issues apublic advertisement to the effect that he

would give Rs.100 to anyone who brings back hismissing dog. This is a general offer. Any member of the public can accept this offer bysearching for and bringing back Sunil's missing dog. An offer to do or not to do must be made with a view to obtaining the assent of the otherparty. Mere enquiry is not an offer. An offer should may contain any term or condition. The offeror may prescribe any mode of acceptance. But he cannot prescribe the form or time of refusal so as to fix a contract onthe acceptor. He cannot say that if the acceptor does not communicate his acceptancewithin a specified time, he is deemed to have accepted the offer. The offeror is free to lay down any terms any terms and conditions in his offer. If the otherparty accepts it, then he has to abide by all the terms and conditions of the offer. It isimmaterial whether the terms and conditions were harsh or ridiculous. The special terms orconditions in an offer must be brought to the notice of the offeree at the time of making aproposal. A n o f f er i s ef f ec t iv e o n l y w h en i t i s c ommu ni c a t ed t o t he off er e e. C ommu ni c a t i o n i s necessary whether the offer is general or specific. The offeror may communicate the offerby choosing any available means such as a word of mouth, mail, telegram, messenger, awritten document, or even signs and gestures. Communication may also be implied by hisconduct. A person can accept the offer only when he knows about it. If he does not know,he cannot accept it. An acceptance of an offer, in ignorance of the offer, is no acceptanceat all.It should be noted that an invitation to offer is not an offer. The following are only invitations tooffer but not actual offers: Invitations made by a trade for the sale of goods. A price list of goods for sale. Quotations of lowest prices. An advertisement to sell goods by auction. An advertisement inviting tenders. Display of goods with price-tags attached. Railway time-table. Prospectus issued by a company. Loud speaker announcements. Question 5: Find out a case where a person appealed under the Consumer protectionAct and won. Answer: The Consumer Protection Act was born in 1986. It is described as a unique legislation of itskind ever enacted in India to offer protection to the consumers. The Act is claimed to havebeen designed after an in-depth study of consumer protection laws and arrangements in UK,t he US A, Au st r a l i a a nd New Z ea l a n d . T h e ma i n o b j ec t i v e o f t h i s Act i s t o p rovi de bet t er protection to the consumers. Unlike other laws, which are punitive or preventive in nature theprovisions of this Act are compensatory in nature. The Act intends to provide simple, speedyand inexpensive re-dressal to the consumers grievances.

Question 6: What does the Information Technology Act enable?Answer:Information Technology Act: In May 2000, at the height of the dot-com boom, India enacted the IT Act and became part of a select group of countries to have put in place cyber laws. In all these years, despite thegrowing crime rate in the cyber world, only less than 25 cases have been registered under theIT Act 2000 and no final verdict has been passed in any of these cases as they are now pendingwith various courts in the country. Although the law came into operation on October 17, 2000, it still has an element of mysteryaround it. Not only from the perception of the common man, but also from the perception of lawyers, law enforcing agencies and even the judiciary. The prime reason for this is the fact that the IT Act is a set of technical laws. Another majorhurdle is the reluctance on the part of companies to report the instances of cyber-crimes, asthey don't want to get negative publicity or worse get entangled in legal proceedings. A majorhurdle in cracking down on the perpetrators of cyber-crimes such as hacking is the fact thatmo s t o f t h e m a r e not i n Ind i a . T he IT Ac t doe s g iv e ext r a - t er r it or i a l j u r i s d i c t i o n t o l a wenforcement agencies, but such powers are largely inefficient. This is because India does nothave reciprocity and extradition treaties with a large number of countries.The Indian IT Act also needs to evolve with the rapidly changing technology environment thatbreeds new forms of crimes and criminals. We are now beginning to see new categories andvarieties of cyber-crimes, which have not been addressed in the IT Act. This includes cyberstalking, cyber nuisance, cyber harassment, cyber defamation and the like. Though Section 67of the Information Technology Act, 2000 provides for punishment to whoever transmits orpublishes or causes to be published or transmitted, any material which is obscene in electronicform with imprisonment for a term which may extend to two years and with fine which mayextend to twenty five thousand rupees on first convection and in the event of second mayextend to five years and also with fine which may extend to fifty thousand rupees, it does notexpressly talk of cyber defamation. The above provision chiefly aim at curbing the increasingnumber of child pornography cases and does not encompass other crimes which could havebeen expressly brought within its ambit such as cyber defamation.