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LEGAL ASPECTS OF BUSINESS

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 PROPOSAL Acc to Section 2(a) of the Act, when one

person signifies to another his willingness to do anything with a view to obtain the assent of the other to such act ,he is said to make a proposal.

SOME FUNDAMENTAL DEFINITIONS

ACCEPTANCE & PROMISE Acc to Section 2(b)of

Indian Contract Act, when a person to whom the proposal is made signifies his assent thereto ,the proposal is said to be accepted. A proposal when accepted ,becomes a promise.
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PROMISOR & PROMISEE Acc to Section 2(c) of the

Act , the person making the proposal is called the promisor and the person accepting the proposal is called the promisee.
CONSIDERATION Section 2(d), when at the desire of

the promisor, the promisee has done, or abstained from doing, promises to do or abstained from doing something, such an act or promisee is called a consideration of the promisee.
AGREEMENT Section 2(e),every promise and every

set of promise forming the consideration for each other is 3/11/12 an agreement.

RECIPROCAL PROMISE Section 2(f), promises

which form consideration for each other.

VOID AGREEMENT Section 2(g),an agreement not

enforceable by law is called void agreement.

CONTRACT Sec 2(h), an agreement enforceable law is

called a contract.
VOIDABLE CONTRACT Sec 2(i), A voidable

contract, unlike a void contract, is a valid contract. At most, one party to the contract is 3/11/12 bound.

VALID CONTRACT & ITS ESSENTIALS

Valid contract: An agreement which has all the
essential elements of a contract is called a valid contract. 2 Main Characteristics of a Contract : 1. An agreement between the parties. 2. The agreement should ne enforceable by law.

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Essentials of a valid contract

1. Agreement proposal & acceptance. 2. Competency & contractual capacity of parties 3. Free consent of parties 4. Lawful consideration & legal object 5. Agreements not expressly declared void 6. Writing & registering agreements 7. Capable of performance
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All contracts are agreements but all Agreements are not contracts.

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Performance of Contract
Performance : After a contract is made, the parties are obliged by law to fulfill the promise they have made. When both the parties have fulfilled their respective obligations , the contract is deemed to be performed.

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POC covers the following issues:

1. Obligation of parties to the contract a. actual performance b. attempted performance or an offer of performance 2. Effect of refusal to accept offer of performance

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3.

Identity of the performer By whom contract must be performed : a. by promisor himself b. by agent of promisor c. by legal representative of promisor d. performance by 3rd party

4.

Time & place of performance a. where no application is to be made & no time is specified

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b. Where time is specified c. When application is to be made by the promisee for performance on a certain day

c. Application by promisor when no place is fixed for performance d. Performance in a manner or time prescribed by promisee. 5. Performance of reciprocal promise a. unilateral contract
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b. bilateral contract

Promises are classified as : a. b. c. Mutual & Concurrent promises Mutual & independent promises Conditional & dependent promises.

Order of performance of reciprocal promises : 1. Where reciprocal promise need to be performed at the same time.
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party preventing the other from performing

Breach of contract & its remedies

A contract is discharged or terminated when the obligations under it are performed. But , if a party does not perform or refuses to perform the contract , it amounts to what is called breach of contract. The party who refuses to perform is called defaulting party & the other party is called aggrieved party.

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Remedies :
1. Exoneration

2. Claim for damage 3. Claim for quantum merit 4. Claim for specific performance 5. Claim for injunction

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Types of Damages:
1. General damage 2. Special damage 3. Vindictive damage 4. Nominal damage 5. Liquidated damages 6. Interest as damages

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Quasi / Implied / Constructive Contract :

Its a transaction in which there is no contract between the parties , the law creates certain rights & obligation between them which are similar to those created by a contract. Eg: A gas company sends a gas cylinder to A but , by mistake it is delivered to B , who takes it & use it . Here the company reserves the right to receive the payment for cylinder from B
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Characteristics:
a. Such contracts are not made by the desire of the parties but are created by law of land. b. There is no agreement at all between the parties. c. The contract come into being after a party has received a profit or money.
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Types of Implied Contract:

2. Interest in payment due by another

1. Supply of necessities to person incompetent to contract. 3. Voluntary but non gratuitous(without cause) acts 4. Responsibility of finder of goods 5. Payment of money or deliver of goods by mistake or under coercion

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