Name: - Shivendra singh

Roll No-1208005653

MB 0051 LEGAL ASPECTS OF BUSINESS Q1. Write short notes with examples: a) Offer and acceptance Offer: An offer can be made by any act or omission of party proposing by which he intends to communicate such proposal or which has the effect of communicating it to the other. Types of Offer Express offer Implied offer Offer by abstinence

Acceptance: Section 2(b): When the person to whom the offer is made signifies his assent thereto, the offer is said to be accepted. When the acceptance is gathered from the surrounding circumstances or the conduct of the parties, it is called implied acceptance. Section 4: The communication of an offer is complete when it comes to the knowledge of the person to whom it is made. Communication of acceptance has two aspects: -- As against the offer or when it is put into a course of transmission to him as to be out of the power of the acceptor. -- As against the acceptor, when it comes to the knowledge of the offer. b) Capacity to contract A contract is an agreement, enforceable by law, made between at least two parties by which rights are acquired by one and obligations are created on the part of another. The requirement of capacity to contract usually means that the individual obtaining insurance must be of a minimum age and must be legally competent; the contract will not hold if the insured is found to be insane or intoxicated or if the insured is a corporation operating outside the scope of its authority as defined in its charter, bylaws, or articles of incorporation.

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Q2. Discuss the rights and liabilities of a surety. A) Rights Rights of a creditor The creditor is entitled to demand payment from the surety as soon as the principal debtor refuses to pay or makes default in payment.

 Creditor has a right of general lien on the securities of the surety in his possession. The creditor is entitled to proceed in the suretys insolvency and claim the pro rata dividend. Rights against the creditor In case of fidelity guarantee, the surety can direct creditor to dismiss the employee whose honesty he has guaranteed, in the event of proved dishonesty of the employee. The creditors failure to do so will exonerate the surety from his liability. Rights against the principal debtor Right of subrogation Right to be indemnified Rights against co-sureties Sec.146 - When a surety has paid more than his share or a decree has been passed against him for more than his share. Sec.147 - When, the co-sureties have guaranteed different sums, they are bound to contribute equally. B) Liabilities Sec.128 - The surety is liable for all those amounts the principal debtor is liable for. The liability of a surety is called as secondary or contingent, as his liability arises only on default by the principal debtor. Conditions precedent to liability of surety prima facie the surety may be proceeded against without demand against him, and without first proceeding against the principal debtor. It is not necessary for the creditor, before proceeding against the surety, to request the principal debtor to pay, or to sue him, although solvent, unless this is expressly stipulated for.

Q3. How is an agency formed? Discuss the classification of agents. A) Formation of agency Agency by appointment -- An agency is created by express appointment when the principal appoints the agent by express agreement with the agent. -- Contract law principles apply to an agency agreement. An agent may agree to act in consideration for a reward.

-- The general rule is that agency may be created orally and there is no formality for the creation of agency by express agreement, except for one situation which is discussed below. Agency by estoppels -- Agency by estoppels arises when A makes a representation to a third party. -- In agency by estoppels, the authority of the agent is described as only apparent or ostensible but not actual. -- The extent of apparent or ostensible authority of the agent in an agency by estoppels depends largely upon the contents of the representation made by the principal to the third party who relies and acts on the representation. Agency by ratification -- Ratification by itself only creates an agency relationship between the principal and the agent in respect of the act ratified by the principal. -- The person who ratifies an act of another person must have been in existence and have the legal capacity to carry out that act himself both at the time when the act was done and at the time of ratification. Agency of necessity -- Agency of necessity arises only when it is practically impossible for the agent to communicate with the principal before the agent acts on behalf of the principal. -- Authority to act in case of emergencies cannot usually prevail over express instructions to the contrary given by the principal. B) Classification of agents Commission agent: he buys or sells the goods for the buyer or the seller and receives commission. He may or may not have possession of the goods. Auctioneer: He has an authority to sell the goods of his principal in public auction. He has no implied authority to sell by private contract. He has the possession of the goods. He cannot sell the goods on credit Del-credere agent: he is an agent who for an extra commission or remuneration guarantees the performance of the contract by the third person with whom he enters into the contract on behalf of his principal Sub agent: An agent appointed by the original agent is called a sub agent. He is under the control of the original agent to the business of the agency (Sec 191). Co-agent: When two or more persons are appointed as agents by the principal to act as such jointly or severally, they are called Co-Agents. Co-Agents should concur together in exception of their authority to bind the principal

Substitute agents: (Sec 194 & 195) Where an agent holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly.

Q4. Discuss the registration of firm under section 58 of Indian Partnership Act, 1932. Explain what partnership deed is. A) Registration of firm It may be registered by post or delivering to the registrar of Firms with a statement in the prescribed form and for stating: The firms name The place or the principal place of business of the firm, The names of any other places where the firm carries on business, The date when each partner joined the firm, The names in full and addresses of the partners and The duration of the firm Application shall be signed and verified by all the partners or their duly authorized agents. Application shall be accompanied by prescribed fee as well as the following documents:

Prescribed Registration Form for Incorporation of a Company. (Form No. 1 and Specimen of Affidavit) Certified true copy of the Partnership deed entered into. ownership proof of the principal place of business

Name of the firm should not contain any words which may express or imply the approval or patronage of the government except where the government has given its written consent for the use of such words as part of the firms name. Under Section 59 of the Act, when the Registrar of Firms is satisfied that the provisions of section 58 have been duly complied with, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration. Penalty for furnishing false particulars (Section 70) B) Partnership deed A written agreement which is called Partnership deed or agreement is prepared to avoid misunderstanding and litigation between partners. The partnership deed is required to be stamped according to the provisions of the Stamp Act, 1899.

Sec.3 - The unrevealed provisions of the Indian Contract Act, 1872 save insofar as they are inconsistent with the provisions of this Act, shall continue to apply to firms. Sec.2(e) - Expressions used but not defined in this Act and defined in the Indian Contract Act, 1872, shall have the meanings assigned to them in that Act. As a partnership agreement is a contract, the provisions of the Indian Contract Act, 1872, are applicable to it.

Q5. What do you mean by negotiable instruments? What are the various types of negotiable instruments recognized by the negotiable instruments act, 1881? A) Meaning Negotiable instruments are primarily contained in the Negotiable Instruments Act, 1881, which came into force on 1st March, 1882. Instrument means any written document by which a right is created in favor of some person. The word negotiable has a technical meaning whereby rights in an instrument can be transferred by one person to another. An Instrument as referred to in the Act is a legally recognized written document, whereby rights are created in favor 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. B) Types Negotiable Instruments by Statue: promissory note, bills of exchange and cheque. Negotiable Instruments by Usage: Bank note, draft, share warrants, bearers, debentures, dividend warrants and Treasury bill.

According to Section of the Negotiable Instruments Act means "A negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.' But in Section 1, it is also described that Local extent, saving of usage relating to hundis, etc., Commencement. -It extends to the whole of India but nothing herein contained affects the Indian Paper Currency Act, 1871, Section 2, or affects any local usage relating to any instrument in an oriental language. Provided that such usages may be excluded by any words in the body of the instrument, which indicate and intention that the legal relations of the parties thereto shall be governed by this Act; and it shall come into force on the first day of March, 1882. Main Types of Negotiable Instruments are

1. Inland Instruments 2. Foreign Instruments 3. Bank Draft 4. Bearer Q6. Who is a consumer? Examine the rights of a consumer enshrined under the consumer protection act, 1986. A) Definition of consumer A consumer is a person or group of people, such as a household, who are the final users of products or services. The consumer's use is final in the sense that the product is usually not improved by the use. An individual who buys products or services for personal use and not for manufacture or Resale a consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements. Any time someone goes to a store and purchases a toy, shirt, beverage, or anything else, they are making that decision as a consumer. A person who buys any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment i.e., in respect of hire-purchase transactions. A person who hires or avails of any services for consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment.

B) Rights of consumers The main rights of consumers are as follows: -- Right to safety: Consumers have the right to be protected against the marketing of goods which are hazardous to life and health. Food additives and colors, dangerous toys, flammable fabrics, unsafe appliances are examples of such goods. Consumers are entitled to healthy and safe products. -- Right to information: It means the right to be informed about the quality, quantity, potency, purity, standard and the price of goods so as to protect the consumers against unfair trade practices. -- Right to choose:

Consumers must have access to a variety of goods at competitive prices. Free competition and wide variety enable consumers to choose the best goods. -- Right to be heard: Consumers need to be assured that their interests will receive due consideration at appropriate forums. -- Right to education: Consumers have the right to be made aware of their rights and remedies available to them for redressal of their grievances. -- Right to redressal: Standing machinery must be provided for quick and satisfactory redressal of consumer grievances against unfair trade practices and exploitation by unscrupulous elements. -- Right to healthy environment: Consumers have the right to live in a pollution free environment. This is necessary to enhance the quality of human life.