ASSIGNMENT A

Question1: The fundamental attribute of corporate personality is that company is a legal

entity distinct from the members. Elucidate the statement. Also specify the important
features of a company.
Answer: In the Eye of Court, Company is an independent identity. It is an artificial person.
There is no body, soul or brain but it works like a human being. It can buy and sell on its own
name. No members have right on company except their invested share capital. So, no share
holder sells or buy the companys property. They can only sell their bought share at its current
market value. It is not just association of persons like partnership. It has full independent legal
entity. Death or birth of new shareholder will not affect the existence of a company. Shareholders
are not also the agent of company. Company will not die with the death of any shareholder.
When any shareholder will die, his shares will transfer to other authorize party.
There are some exceptions when this rule will not apply. For example, when any company starts
acting like an agent of shareholders. At that time, company and its shareholders will not
different. At that time, its liability will be unlimited.
The following are the main characteristics and distinctive features of a company form of
enterprise:
1. An Association of Persons:
At least two persons or seven persons must come together to form a private or a public company
respectively. A single individual cannot constitute a company. This is the reason why a company
is called on Association of Persons.
2. Incorporated Association: A company comes into existence only after a certificate of
incorporation has been obtained from the Registrar of Joint Stock Companies. Without
incorporation, it has no legal existence.
3. Artificial Legal Person: A company is an artificial person created by law to achieve the
objectives for which it is formed. A company exists only in the contemplation of law. It is
artificial person in the sense that it is created by a process other than natural birth and does not
possess the physical attributes of a natural person.

It is invisible, intangible, immortal and exists only in the eyes of law. It has no body, no soul and
no conscience; it is regarded as an artificial person.
4. Distinct Legal Entity: A company is a legal person having a juristic personality entirely
distinct and independent of the individual persons who are its members. It enjoys in many
respects the right of a natural person in the eyes of law.
It can own property, conduct a lawful business, enter into contracts with others, buy, sell and
hold property, all in its own name under its own seal. It can file a suit against others and can be
sued against.
5. Perpetual Succession: A company has perpetual existence i.e. its existence is not affected by
the death or lunacy or insolvency or retirement of its member.
Members may come and go, but the company continues its operations so long as it fulfils the
requirements of the law under which it has been formed. Thus, a company has a perpetual
succession irrespective of its membership.
6. Limited Liability: Liability of members of a limited company is limited to the face value of
the shares subscribed by each of them. Members cannot be asked to pay anything more than
what is due or unpaid on the shares of the company held by them.
In no case the personal property of the members of a company can be attached to satisfy the
claims of creditors of a company.
7. Transferability of Shares: Members of a public limited company are free to transfer the
shares held by them to any one members for either to purchase or sell the shares.
8. Diffused Ownership: Ownership of a company is in the hands of a large number of people. In
case of Private Ltd. Company, the upper limit is up to 50. In case of a public Ltd. Company there
is upper limit to the number of members.
Any individual is free to acquire the share of any company and become to the owner to that
extent only. As such ownership is spread among a number of share holders.

9. Separation of ownership and management: Share holders are the owners of the company.
Companys share holders are widely scattered. It is physically impossible for all of them to take
patty in the management of the company.
Being a share holder of a company does not give him the right to manage the affairs of a
company. The management is vested with the directors, who are the legal representatives of the
shareholders. Thus owners of the company have no direct control over the management of the
company.
10. Common Seal: A company being an artificial person cannot sign documents for itself
whereas a natural person can do. The law has provided for the use of a common seal, with the
name of the company engraved on it, as substitute for its signature.
The common seal of the company is approved in the first Board Meeting held immediately after
the incorporation. Common seal has to be affixed on all important documents and contracts.
Any document bearing the common seal of the company duly signed by at least two directors
will be legally binding on the company.
11. Corporate Finance: A company generally raises large amount of funds in form of issuing
shares, debentures, bonds and incurring loans and advances from financial institutions. The total
share capital of a company is divided into a number of shares which are held by individual
members and institutions.
12. Object clause of Business: A company can conduct only such business as stated in its first
Memorandum of Association. In order to bring any charges in its activity, the object clause must
be changed.
13. Publication of Accounts: A joint stock company is required to file annual audited statements
with the Registrar of Companies at the end of each financial year. The annual statements are
available for inspection in the office of the Registrar.

Q. 2 Explain the essential elements of a valid contract.

Answer:
Contract by definition is an agreement enforceable by Law. Essential elements of a
valid contract are:1. Offer & acceptance: To constitute a contract, there has to be an
agreement between two parties. Agreement on the offer by the one and its
acceptance by another. A party who makes an offer is called the offeror and
the party to whom the offer is made is the offeree.
2. An Intention: The intention to create a legal relationship is must. An
agreement of domestic and social nature is not a contract.
3. Law full consideration: Agreement should be with some considerations.
Parties to the agreement should give or promise something, receive
something or promise in return with in the diameter of on act which law
permit.
4. Competency of parties: Parties should be competent to enter into contract.
Contract cannot be made with minor or lunatic persons.
5. Free Consent: Consent of the parties entering into agreement should be free
and genuine. Consent should not be obtained by coercion, influence of
fraud, misinterpretation or mistake.
6. Law full object: Agreement should be lawful and not disapproved by Law.
7. Agreement not declared void: Certain Agreements have been declared void or
illegal. In such cases, even if the Agreement has all the essential clauses of
an valid agreement, it will still not be enforceable by the Law.
8. Certainty & possibility of performance: Agreement should be enforceable, i.e
something which can be achieved
9. Legal formalities: Agreement can be oral or written. If certain contract
requires the agreement to be in writing, it must be put in writing. e.g. An
application form to admit a child to a school, may also needs to be registered
and attested.
These formalities are essential to have this contract
enforceable by the law.

Q 3 Explain - different modes of crossing of a cheque and section 138 as per the
provisions of the Negotiable Instrument Act, 1881.
Ans
Cheques can be of two types:1. Open or an uncrossed cheque
2. Crossed cheque
Types of crossing
Cheque crossed generally
Where a cheque bears across its face an addition of the words 'and company' or any
abbreviation thereof, between two parallelr transverse lines, or of two parallel
transverse lines simply, either with or without the words 'not negotiable', that addition
shall be deemed a crossing, and the chq shall be deemed to be crossed generally and
can be credited to any account without endorsement but through a (account)banking
channel so that the beneficiary may be traced.
Cheque crossed specially
Where a cheque bears across its face an addition of the name of a banker, either with
or without the words 'not negotiable', that addition shall be deemed a crossing, and
the cheque shall be deemed to be crossed specially, and to be crossed to that banker.
This is called special-crossed cheque.
Account-payee or restrictive crossing
This crossing can be made in both general and special crossing by adding the words
account payee. In this type of crossing the collecting banker is supposed to credit the
amount of the cheque to the account of the payee only. The cheque remains
transferable but the liability of the collecting banker is enhanced in case he credits the
proceeds of the cheque so crossed to any person other than the payee and the
endorsement in favour of the last payee is proved forged. The collecting banker must
act like a blood hound and make proper enquiries as to the title of the last endorsee
from the original payee named in the cheque before collecting an 'account payee'
cheque in his account. The same can be done by place slanted parallel line in the top
most left corner of the cheque - then writing over them "A/C payee only".

Not-negotiable crossing

The words 'not negotiable' can be added to general- as well as special-crossing and a
crossing with these words is known as not negotiable crossing. The effect of such a
crossing is that it removes the most important characteristic of a negotiable
instrument i.e. the transferee of such a crossed cheque cannot get a better title than
that of the transferor (cannot become a holder in due course) and cannot convey a
better title to his own transferee, though the instrument remains transferable.

Section 138 as per the provisions of the Negotiable Instrument Act, 1881
Where any cheque drawn by a person on an account maintained by him with a banker
for payment of any amount of money to another person from out of that account for
the discharge, in whole or in part, of any debt or other liability, is returned by the
bank unpaid, either because of the amount of money standing to the credit of that
account is insufficient to honour the cheque or that it exceeds the amount arranged to
be paid from that account by an agreement made with that bank, such person shall be
deemed to have committed an offence and shall without prejudice to any other
provisions of this Act, be punished with imprisonment for 2["a term which may extend
to two year"], or with fine which may extend to twice the amount of the cheque, or with
both:

Q 5 Elaborately explain the essential features of the consumer protection act

1986. Also briefly discuss unfair trade practice and restrictive trade practice as
discussed under consumer protection Act?
Ans
Essential features of the consumer protection act
.1Social Welfare Law : It is a highly progressive piece of social welfare legislation. It is
acclaimed as the Magna Carta of Indian consumers. This is a unique law which directly
pertains to consumers in the market place and seeks to redress complaints arising there
from.

2. Comprehensive Provisions and Effective Safeguards: Its provisions are very

comprehensive. It provides effective safeguards to the consumers against various types

of exploitation and unfair trade practices. In fact, it provides more effective protection to
consumers than any other law in India.
3. Special Consumer Courts: The Consumer Protection Act has created special
consumer courts for enforcement of the rights of consumers.
4. Three-Tier Grievance Redressal Machinery: The Consumer Protection Act provides
for a three-tier consumer grievance redressal machinery District Forums at the base,
the State Commission at the middle level and the National Commission at the apex
level. The redressal machinery is quasi-judicial in
nature.
5. Simple and Inexpensive : There are no complicated or elaborate procedures or other
technicalities. The redressal machinery is merely to observe the principles of natural
justice. No court fee any other charge is to be paid by the complainant. It is not
mandatory to employ any advocate. The complainant can write his grievance- on a
simple paper along with the name and address of the opposite party against whom the
complaint is made.
Thus, the consumer protection Act provides a simple, convenient and inexpensive
redressal of consumer grievances.

unfair trade practice and restrictive trade practice

According to the provisions of the Consumer Protection Act, 1986 unfair trade practice
means a trade practice which, for the purpose of promoting the sale, use or supply of
any goods or for the provision of any service, adopts any unfair method or unfair or
deceptive practice including the practice of making any statement, whether orally or in
writing or by visible representation which falsely represents that the goods are of a
particular standard, quality, quantity, grade, composition, style or model; falsely
represents that the services are of a particular standard, quality or grade; falsely
represents any re-built, second-hand, renovated, reconditioned or old goods as new
goods; makes a false or misleading representation concerning the need for, or the

usefulness of, any goods or services etc. permits the publication of any advertisement
whether in any newspaper or otherwise, for the sale or supply at a bargain price, of
goods or services that are not intended to be offered for sale or supply at the bargain
price. Bargaining price has been defined as a price that is stated in any advertisement
to be a bargain price, by reference to an ordinary price or otherwise, or a price that a
person who reads, hears or sees the advertisement, would reasonably understand to be
a bargain price having regard to the prices at which the product advertised or like
products are ordinarily sold.
The Act defines restrictive trade practice as a trade practice which tends to bring about
manipulation of price or conditions of delivery or to affect flow of supplies in the market
relating to goods or services in such a manner as to impose on the consumers
unjustified costs or restrictions and shall include delay beyond the period agreed to by a
trader in supply of such goods or in providing the services which has led or is likely to
lead to rise in the price; any trade practice which requires a consumer to buy, hire or
avail of any goods or services as condition to buying, hiring or availing of other goods or
services

Assignment C
Case Study
Q 1 Elaborately state the important legal issue/s covered under this case.
Ans
The major legal issue in this case is weather the petitional has withdrawn the tendor
before it was opened in accordance with the terms and condition of tendor notice
According to the tendor notice the tendor were to be opened as per the allocated time
but mere opening was not sufficient as valid bidders has also to be found out which was
not done
Clasue 12 was also raised but that does not come into the view as it comes only when
bidders are seen

Q 2 What are the essential features of a tender?

Ans
There must be an un-conditional offer to perform, coupled with a manifested ability to
carry out the offer, and a production of the subject-matter of the tender;
The amount tendered must not be less than what is due and if greater, there must be no
demand for a return of the excess.
The medium of payment must be that which the contract specifies or in the absence of
contractual definition that which the law has made legal tender; the time must be that
fixed by the contract or by law; it must not be before maturity;
Hour of the day must be reasonable.7

Q 3 Give your reasons in support of your decision for the issue discussed in this case

Ans
The major support is that the petitioner has asked for refund of the E.M.D before
opening of the tendor which shows that they di not want ot participate. This was doen
before opening of the tendor
This clearly shows that that were not longer interested in the tender and since also this
was done before opening the tendor makes their case valid

ASSIGNMENT C
1. After exercising the right of lien, the seller can resell the goods of perishable
nature
Options
After giving 7 days notice of resale to buyer
After giving one week's Notice
Without giving any notice
None of these

2. Annual general Meeting is required to be held--Options

By a private company only
By a public company only
By a company limited by guarantee only
By all kinds of companies

3. An acceptance is complete and effective only when it has been--Options

Communicated to the offerer
Merely mentally accepted
Externally manifested
Kept in the drawer
4. Name of a company can be changed by passing a special resolution and with
the approval of-Options
The company law tribunal

The Central Government

The Registrar of Companies
none of the above

5. A contract becomes voidable if it has been caused by--Options

Coercion
Fraud
Undue Influence
All of them

6. If the goods have perished, the contract of sale of such specific goods, will
become--Options
voidable
void
illegal
None of these
7. Articles can be altered by--Options
Ordinary resolution
Special Resolution
Resolution requiring special notice
Unanimous resolution
8. A contract entered into between the parties by words is called--Options
An express contract
An implied contract
A quasi Contract
An excited contract

9. A prospectus is issued--Options
By a Private LImited Company
By a Public Limited Company
By a Company limited by Guarantee
None of these
10. When, before the contract becomes due for performance, the promisor
declares his intention of not performing his promise, it is called--Options
Remission
Waiver
Alteration
Anticipatory breach
11. A bailment cannot be made about--Options
Car
Furniture
Money
Television
12. The damages which arise in the usual course of things happening from the
breach of contract, are called--Options
Remote Damages
Ordinary damages
Special damages
Nominal Damages

13. When a person is employed to represent another in dealings with third

person, it is a contract of--Options
Bailment
Guarantee

Agency
Pledge

14. Which of the following is not an essential element of a contract of sale--Options

Goods as subject matter
Transfer of property in goods
Price
Railway receipts
15. Which of the following does not relate to termination of agency by operation
of law--Options
Death of principal
Insolvency of principal
Destruction of subject-matter
Revocation of authority by the principal
16. Limited liability means liability of its--Options
Debtors is limited
Creditors is limited
Members is limited
Debenture holders is limited
17. In a contract of sale, property means--Options
Raw Materials
Movable goods
Ownership
Immovable property

18. The goods which are yet to be acquired by the seller, are called--Options
Existing Goods
Contingent Goods
Unascertained goods
Future goods

19. Acceptance of an offer is complete as against the offeror as soon as--Options

The offerer knows about it
The letter of acceptance is posted
The letter of acceptance is signed by offeree
The letter is handed over to a delivery person
20. If a company fails to pay its debts suit can be filed against the--Options
Directors
Members
Officers
Company
21. A contract with a minor is--Options
Illegal
Valid
Void
Voidable
22. Who is liable for the supply of necessaries to a minor--Options
His guardian
His Manager
His property
He himself

23. In return for a new television, Raju agrees to give his old television valued at
Rs. 3,000 and an amount of cash worth Rs. 5,000 to Ganesh. This is a--Options
Barter
Exchange
Contract of sale of goods
Sale of approval

24. Which of the following rights is held by an unpaid seller--Options

Right of lien
Right of stoppage in transit
Right of resale
All of these
25. Which of the following is not a remedy for breach of contract--Options
Rescission of the contract
Restitution of benefit
Suit for damages
Alteration of the contract
26. A contract by which one party promises to save the other from loss is called--Options
Contract of guarantee
Contract of indemnity
Quasi contract
None of these
27. Suretys liability is--Options
Primary
Secondary
Absolute

None of these
28. Crossed cheques payable to bearer are negotiated by--Options
Endorsement & delivery
Delivery
Assignment
None of these

29. In a contract of sale, which of the following is treated as implied condition--Options

That the seller has title to goods
That goods are similar to description
That goods are according to sample shown
All of these

30. Consideration must move at the desire of--Options

The Promisor
The promisee
A third party
None of them
31. Which of the following sentence is a valid promissory note--Options
I promise to pay Mohan or order Rs. 1,000.
I promise to pay Hari Rs. 2,000 worth of shares..
I promise to pay Naraynan in East India Bonds
I promise to pay Rakesh Rs. 5,000 and to deliver 50 kg of sugar.
32. A stipulation collateral to the main purpose of the contract, is called a--Options
Condition
Warranty

Guarantee
None of these
33. A person who receives a negotiable instrument for consideration, before
maturity, and in good faith, is called--Options
Holder for value
Holder
Holder in due course
None of these
34. A director must vacate his office if he fails to obtain qualification shares
within--Options
1 week
two weeks
One month
two months
35. A private company has at least--Options
7 members
3 members
3 directors
2 Members
36. A cheque payable to order may be negotiated--Options
by delivery
By endorsement
By endorsement & delivery
None of these
37. Which of the following endorsements is invalid--Options
Restrictive endorsement
Conditional endorsement
Special endorsement

Partial endorsement

38. When a cheque bears across its face an addition of the words & between
two parallel transverse lines, it is called--Options
Special crossing
Restrictive crossing
General crossing
Double crossing
39. Which of the following is a mode of discharge of contract--Options
By impossibility of performance
By lapsse of time
By breach of contract
All of the above

40. Which of the following rights are available to a finder of goods--Options

Right of lien
Right to file a suit for reward
Right of sale of goods
All of these