Business Law

SC Basu

The Indian contract Act,1872

>Contract- it is an agreement between two
parties which is enforceable by law.
Elements of contract agreementenforceability under this act
Elements of agreement- one person
makes a proposal to someone- 2 nd person
accepts the same- terms are agreed which
are to be fulfilled.
Agreement- means Offer + Acceptance

Elements of valid Contract

Offer & Acceptance Two parties are
required one makes offer & other
accepts the same.
Terms of offer must be specific
Acceptance of offer-must be absolute & it
must be communicated by the offeror.
Lawful consideration must be supported
by consideration which means a benefit or
something in return.

Elements of valid contract

Competency of parties-he must be a Majorsound mind-not disqualified from contracting by
any law.
Free & genuine consent between the partieswhen they are of same mind on all material
terms of contract not induced by coercion,
undue influence, fraud, mis-representation of
facts, etc.
Lawful object it must not be illegal-immoralopposed to public policy.

Certainty & possibility of

performance
It must be certain-not vague or indefinitecertainty of performance within a specific
period.
Legal formalities- must be made by words
spoken or written-in some cases the
contract should be reached on stamp
paper & registered as statutory
requirement.

Classification of contract
>Void Agreement- an agreement which is not
enforceable by law eg. Agreement with a
minor/without consideration
Void contract- which ceases to be enforceable by
law-the contract when originally entered into,
was valid & binding on parties.
Voidable contract-a contract which is enforceable
by law at the opinion of one party & not at the
opinion of other party. This happens when
essential elements of free consent is missing.

Classification of contract
Illegal agreement An agreement which
involves transgression of some basic rule of
public policy & is criminal in nature or immoral- it
is void.
Express contract-it is a contract where the terms
are stated in words ( spoken/written) by the
parties.
Implied contract- it is inferred from
circumstances of the case or from conduct of
parties-it is not the result of any express promise
by the parties but of their particular acts or
conducts.

Classification of contract
Quasi contract-it is not a contract at all-it is
an obligation created by law regardless of
agreement.
Executed contract-it is a contract which is
wholly performed by the parties
Executory contract-a contract in which
promises of both the parties are yet to be
performed.

Classification of contract
Partially executory & partially executed
contract-a contract in which one party is
yet to fulfill his obligations & other party
has already fulfilled his obligations.
Unilateral contract- it is one sided contract
Bilateral contract-a contract in which both
the parties have yet to fulfill their
obligations. It is similar to executory
contract.

Offer & Acceptance

Offer is a proposal by one party to enter
into legally binding agreement with other
party
Person who makes offer is called
offerer/proposer/promisor
Person to whom the offer is made is
calledOfferee/proposee
When offeree accepts the offer, he is
called Acceptor or promisee.

Legal rules of offer

It must be capable of being accepted &
give rise to legal relationship
Terms must be definite, unambiguous &
certain.
It must be communicated.
It must be made with a view to obtaining
an assent.
A statement of price is not offer.

Legal rules of acceptance

It must be absolute & unqualified
It must be communicated to the offerer
It must be according to the mode
prescribed
It must be given within a reasonable time
The acceptor should have intention to
fulfill its terms
It can not be implied from silence.

Consideration
It is the price for which the promise of the offer is
bought. When the party to an agreement
promises to do something, he must get
something in return. That something is
consideration.
It is an act of doing something in affirmative
form.
It is also an act of refraining from doing
something
It is a return promise.

Legal rules of consideration

It may move from the promisee to another
person i.e. even to a stranger.
It may be an act, abstinance or a return promise.
It must move at the desire of the promisor
It may be past, present or future- it may be
present or executed consideration- it may be
future or executory consideration.
It need not be adequate
It must be real nor illusory
It must not be illegal, immoral or opposed to
public policy

Contract without consideration

It is void
Natural love & affection is valid though there is no
consideration
A promise to compensate to a person who has already
voluntarily done something for the promisor, is
enforceable, even though without any consideration.
A promise by a debtor to pay time barred debt is
enforceable provided it is made in writing & signed by
debtor/his agent.
Gift- no consideration no contract does not apply in case
of gift.
Charitable subscription- it is legal & enforceable.

Capacity to contract
An agreement becomes a contract if it is entered into
between parties who are competent
Contract may be entered into by* a person who is major
* a person who is sound in mind
* a person who is not disqualified by law
Person who is minor/mentally infirm/disqualified by law
can not enter into contract.

Minors agreement
An agreement with a minor is void& inoperative
He can be a promisee or beneficiary
His agreement cannot be ratified by him on attaining age
of major
If he has received any benefit under a void agreement,
he cannot be asked to compensate or pay for it.
There can be no specific performance of agreement
entered by him as it is void.
Minor cannot enter into an agreement of partnership
He cannot be declared as insolvent
He can be an agent
His parents are not liable for the contract entered into by
him.

Contract of person of unsound

mind
Contract cannot be entered into by* lunatics
* idiots
* drunken or intoxicated person
Such agreement entered into is void
Persons disqualified by law to enter into any
agreement are*alien enemy/diplomats/insolvent/convicts
undergoing imprsonment

Free consent
Free consent means a consent not
entered into through* coercion
*undue influence
*fraud- false representation
*misrepresentation of facts
* mistake

Unlawful consideration
It is forbidden by law
If it defeats provisions of any law
If it is fraudulent
If it involves/implies injury to the
persons/property of another person
If the court regards it as immoral
If the court regards it as opposed to public
policy.

Illegal agreement
It is enforceable
If it affects immediate parties & has no further
consequences
Every illegal agreement is unlawful but every
unlawful agreement is not necessarily illegal.
If it is fraudulent
If it injures to person/property of another person
If the court regards it as immoral
If the court regards it as opposed to public
policy.

Agreement opposed to public policy

Agreement of trading with enemy
Agreement to commit
Agreement which interferes with administration with
justice
Agreement in restraint of legal proceedings
Agreement regarding trafficking in public office
Agreement to restraint parental rights
Agreement restricting parental rights
Agreement in restraint of marriage
Agreement regarding marriage brockerage
Agreement interfering with marital duties

Illegal Agreement
It is an agreement which is not enforceable by
law.
Agreement reached with incompetent persons,
under mutual mistake of facts
& payment of unlawful consideration
Agreement made to restraint marriage, any
trade, legal proceedings, to perform impossible
events/acts
Agreement regarding reciprocal promise to do
something illegal.

Termination of contract
A contract may be terminated by
* discharge of performance
* by agreement of consent
* due to impossibility of performance
* by lapse of time
* by operation of law
* due to breach of terms of contract

Remedies for termination of

contract
Suit of damage
Refusal to perform illegal agreement
Suit upon quantum merit i.e. as much as
earned
Suit for specific performance of contract
Suit for injunction i.e. continuance of
performance

The Companies Act, 1956

It is voluntary association of persons for
some common purpose.
The association is created by a process of
law
It has a perpetual succession
It has a common seal
It is an artificial person-it has no body or
soul.
It is visible only in the eyes of law.

Characteristics of companies
It has a separate legal entity-it has
independent corporate existence.companies money & assets do not belong
to any individual person.
Limited liability-it is limited by shares
Perpetual succession-it never diesemployees may come & go but company
continues to exist till it is dissolved.

Characteristics of companies
Common seal it has no physical existence-it
works through officials under a seal of the
company.
Transferability of shares-shares of the company
can be transferred subject to certain conditionsno shareholder is permanently wedded to a
company.
Separate property-it can own, enjoy & dispose of
its property
Capacity to sue-it can sue & can be suedin its
corporate name.

Kinds of companies
Statutory company-it is created by spl Act
e.g RBI, LIC,SBI,etc.
Registered company-it is registered under
The Companies Act, 1956
Companies limited by shares-members
liabilities are limited to shares- liability can
be enforced during existence of the
company& during winding up of the
company

Kinds of companies
Companies limited by guarantee-members
liability is limited to a fixed amount which they
undertake to contribute to the assets of the
company in the event of winding up.
Unlimited company-7 or more persons(2 or more
in case of private limited) may form the company.
A company without liability is known as unlimited
company.
Private company- A company which has a
minimum paid up capital of rs. 100,000/ Public company-min. paid up capital is Rs. 5
lakhs within 2 years.

Difference between Public &

Private Company
Min. capital Public Rs.5 lakhs- Pvtrs.1 lakh
Min. number Public 7-Pvt 2
Max number public no restriction, Pvt
50
Restriction on appointment of directors
Public muist consent to act as directors
& must be shareholders- Pvt- no such
condition

Differences between Public &

private company
Restrictions on invitation to subscribe for shares- public
general public can take shares/debentures- Pvt- prohibits
public to buy shares/debentures.
Transfer of shares/debentures- Public-freely
transferable- Pvt-right to transfer is restricted
Spl. Privilege- Public no privilege-Pvt- some privileges
Quorum- public 5 embers, Pvt 2 members required
Managerial remuneration Public max 11% of net
profit- Pvt- no such restriction

Classification of companies on the

basis of control
Holding company-a co. is deemed to be holding
co. of another if it is a subsidiary co.
Subsidiary company- it is subsidiary to another
co. when control is exercised by parent
company.
Government company- min. 51% of shares are
held by central/state government
Foreign company-incorporated outside India &
min.51% share capital is held by one or more
Indian/corporate body incorporated in India.

Formation of a company
It is formed by a group of people called
promoters
Purpose of company shall be* lawful activities not against public
interest
* promoters should not be minors,
bankrupts, lunatics or disqualified to enter
into contract.

Documents to be filed for

registration of company
Memorandum of Association
A statement of minimum capital
Notice of address of registered office of
the company
List of Directors & their consent to act as
directors
Declaration that all requirements of the Act
have been complied with.

Certification of incorporation
Registrar issues a certificate of incorporation
whereby it certifies that the company is
incorporated
Effective date of incorporation as mentioned in
the certificate
The company becomes functional under a
common seal
Effective same date, the co. becomes a legal
person-life of the co. commences from the date
mentioned in the certificate of incorporation.

Promoters of a company
Promoters are those persons who do all
necessary work incidental to formation &
creation of an incorporated company.
Promoters are liable for* compliance of provisions of this Act
* any false statement in the prospectus to
a person who has subscribed to
shares/debentures.

Promoters remuneration
He may get lump sum remuneration for his
service
He may get fully or partly paid shares
Option to subscribe within a fixed period for a
certain portion of companys unused shares at
par.
He may get commission
All remuneration to be disclosed in the
prospectus if paid within preceding 2 years or
intended to be paid at any time.

Memorandum of Association
It is a fundamental document of a company
which defines
* reasons for existence
* regulates external affairs of the company
in relation to outsiders
* expresses permitted range of activities
* shareholders may make such regulations
for their own governance as they think fit.

Contents of Memorandum of
Association
Name of the company public/private limited
Address of registered office
Object of incorporation
Share capital i.e. amount of shares
Limited liability- state whether the liability of the
company is by shares or by guarantee

Alteration of Memorandum
Spl. Resolution for change of name
Notice to registrar he examines any objection &
thereafter approves it.
Change of registered office with approval of CLB
Notice to affected parties- alteration requires consent of
shareholders
Alteration of objects to carry on its business more
economically, to attain main purpose by new or
improved means, to carry on some business which may
conveniently combined with the object, to sell
undertaking of company & to amalgamate with any
other company.

Articles of Association
They are rules, regulations & bye-laws for
internal management of the affairs of the
company
Articles are next in importance to
Memorandum of Association which
contains fundamental conditions upon
which a company is allowed to be
incorporated.

Contents of Articles of Association

Lien on shares
Transfer of shares
Alteration of capital
General meetings
Voting rights of members
Appointment of Directors-their remuneration,
qualification, etc.
Manager, secretary, Audit & borrowing power
Capitalization of profit
Winding up

Alteration of Memorandum of
Association
Must not be inconsistent with Act
Must not sanction anything illegal
Must be for the benefit of the company
Must not increase liability of members
Alteration with spl. Resolution
Approval of central government in case of
public ltd. Company
Alteration may be with retrospective effect

Prospectus
It sets out prospects of the company
Purpose for which capital is required
Document for prospective investors to decide about
investment in the company
It is in writing
An invitation to public to subscribe for shares/debentures
It is an offer to public
Must be dated & signed by Directors
Must be registered with Registrar of companies within
90 days of the date
If not registered, the Directors may be fined.

Contents of Prospectus
Name & address of registered office
Consent of central govt.
Name of regional stock exchange where the
company is going to be listed
Date of opening & closing of issues
Name & address of auditors & lead managers
Authorized & subscribed paid up capital
Terms of payment, rights of share holders, any
spl. Tax benefit

Contents of prospectus
History & main objects of present business
Subsidiaries of the company
Name, address & occupation of Directors
Location of project, plant, machinery,
technology
Collaboration agreement
Future prospects, consent of directors,
auditors, solicitors, bankers

Contents of Prospectus
Change of directors during last 3 years &
reasons for the same
Procedure & time schedule for allotment & issue
of certificates
Name & address of company secretary, legal
advisor, Auditors, bankers, brokers to the issue
Auditors report on Profit & loss, assets &
liabilities- rate of dividend in last 5 years
Terms of loan assets
Penalty for contravention of these requirements

Shares
Capital of a company is divided into
invisible units of a fixed amount which is
called share.
A share is evidenced by share certificate
Each share certificate has a number
It is a movable property of the share
holder.
It is transferable.

Types of share
Preference share they have right to be
paid Dividend during lifetime of the
company & have preferential right to the
return of capital when company goes into
liquidation.
Equity share they are not preference
share.

Allotment of share
Minimum subscription as mentioned in the co.
prospectus
Application money- min. 5% of the nominal amount of
share to be paid.
All money recd. From applicants for shares to be
deposited in scheduled bank until share certificate is
obtained.
An investor of share is entitled to share certificate. Two
directors will sign the share certificate.
Duplicate certificate to be issued if it is
lost/destroyed/defaced/mutilated.
Share can be transferred in prescribed form & manner
with co. seal.

Dividend
It is receipt part of profit of a trading company in
proportion to respective shares.
It is payable only out of profit.
Unpaid dividend either not paid paid/claimed
within 30 days from declaration will be
transferred to spl. Dividend account in scheduled
bank within 7 days of expiry of 30 days.
Share holder can claim dividend amount up to 7
years from the date of transfer.

Borrowing power
A trading company can borrow money for
business purpose.
Non-trading co. has no borrowing power
Borrowing is subject to limit set out in Articles of
Association.
Debenture it includes debenture stock, bonds
or any other securities of the co. It creates a
debt for the co-debentures are issued in a
manner similar to share through a prospectus.

Characteristics of Debentures
It is issued by co. in the form of a
certificate which is acknowledgement of
debt.
Issued under co. seal.
It specifies a specific period as the date of
repayment
Debenture holder has no voting right in
company meeting.

Directors
They are persons who have control over
direction, conduct, management of the
affairs of the company.
Public company min. 3 directors
Private company- min. 2 directors
Public company having paid up capital of
Rs. 5 crores or more / shareholders of
1000 or more must have at least 1
director elected by the share holders.

Directors
Retiring director can seek for re-appointment
Central govt. can appoint such no. of directors
on the board to safeguard interest of investors in
public interest
A person who is insolvent/unsound mind/
convicted for moral turpitude & imprisoned for 6
months/has not filed annual return for
continuous 3 years is not entitled to become
director.
Directors remunerations are fixed by share
holders in the AGM.

Winding up of a company
It is proceeding by which a company is
dissolved, assets are disposed of, debts are
paid off.
Procedure for winding up
* spl. Resolution adopted by share holders
* default in delivering the statutory report to
Registrar statutory meeting- failure to
commence business-inability to pay back debtscarrying business in loss & no hope of profit

Procedure for winding up

Petition to the tribunal after passing a resolution
Petition may be made by creditor/registrar for de/fault in
delivering statutory reportsby central Govt for unlawful
activities
Petition must be advertised 14 days before hearing by
court
Court shall intimate official liquidator& registrar
Order of winding up of co.shall be in favour of creditors
Liquidator shall take custody of co. properties-hold
meetings with creditors-present audit report to tribunalappoint inspection committee.

Powers of Liquidator
As per sanction of tribunal
Institute to defend the suit on behalf of
company
Sell movable & immovable properties
Raise money on the security of cos
assets
Draw or accept any bill of exchange on
behalf of company

Powers of tribunal
Stay on winding up procedure
Settlement of list of contributors
Payment of debts to contributors
In case of deficiency of assets, give priority to payment
out of assets, of costs, charges& expenses of winding up
procedure
Summon suspected persons having property of company
In case of fraud for promotion/formation of a company,
order the officials to appear in tribunal for public
examination
Arrest absconding contributory/quit India

Dissolution of company
The tribunal makes an order for dissolution
when affairs of co. have been wound up
- when liquidator can not liquidate for want
of funds
- tribunal finds it reasonable in the
circumstances of the case
The company stands to be dissolved
effective the date of order of the tribunal.

Liabilities of share holders

Payment of debts, liabilities, costs, charges
& expenses
All taxes dues to central/state government
All wages/salaries of employees
All contributions to ESIS, PF, Pension,
Gratuity
All dues for debenture holders & fixed
deposits
Residual amount to share holders

The Negotiable Instruments Act,

1881
Negotiable transferable instrument from
one person to another in return of
consideration
Instrument written document by which a
right is created in favour of some person.
Negotiable instrument a document which
entitles a person to a sum of money 7
which is transferable from one person to
another by delivery.

Promissory Note
It is an instrument in writing containing
unconditional undertaking, signed by
maker, to pay a certain amount to certain
person or to the bearer
Person who makes the promissory note is
called Maker
Person to whom payment is made is
called Payee.

Essential elements of Promissory

note
It must be in writing
Promise to pay
Amount is definite & unconditional
To be signed by maker
Certainty of payee
Promise to pay money only
Number, date, place & consideration
Payable on demand or after definite period.

Bill of Exchange
It is an instrument in writing containing an
unconditional order, signed by maker,
directing a certain person to pay certain
sum of money only to a certain person or
to the bearer of the instrument
Parties to a Bill are person who gives
the order to pay i.e. drawer- person
directed to pay i.e. Drawee- when drawee
accepts the bill i.e. Acceptor

Essential elements of Bill of

Exchange

Must be in writing
Must contain order to pay
Order is unconditional
Requires 3 parties Drawer, Drawee & Payee
Parties must be certain
Must be signed by Drawer
Sum payable must be certain
Must contain order to pay money
Number, date, place & consideration are not essential in
law. But a bill must be affixed with stamp under the
Stamp Act.

Difference between Bill of

Exchange & promissory note
Note- 2 parties i.e. maker & payee
Bill 3 partiesi.e. drawer, drawee 7 payee
Note unconditional promise to pay,
Bill unconditional order to pay
Note maker to debtor
Bill - Drawer is creditor who directs his debtor to pay
Note maker corresponds in general to an acceptor of
Bill & maker can not undertake to pay conditionally
Bill-acceptor may accept conditionally as he is notthe
originator of the bill but can not undertake to pay
conditionally.

Difference between Bill of

exchange & promissory note

Note primary liability of the maker

Bill secondary liability of the drawer
Note not payable to maker
Bill-drawer & payee may be same person
Note-acceptance not required as it is signed by a person who is
liable to pay
Bill -Payable after certain period- must be accepted by drawee
before presenting it for payment
Note-cannot be drawn payable to bearer
Bill -Can be payable to bearer
Note-immediate relation between maker & payee
Bill-immediate relations between acceptor and not payee
Note-no notice required to maker in case of dishonour
Bill- Notice must be given to all who are are made liable to pay in
case of dishonour.

Cheque
It is a bill of exchange drawn upon a
specified banker & payable to a person on
demand.
It includes electronic image of a cheque.
Cheque is specific bill of exchange which
is :* always drawn on a specified banker
* always payable on demand

Dishonour of Negotiable Instrument

A Bill may be dishonoured by non-acceptance or
by non-payment
A promissory note & a cheque may be
dishonoured by non-payment
When a NI is dishonoured, the holder must give
a notice of dishonour to all parties concerned to
make them liable on the instrument.
If he fails to give notice , he forfeits right of
action against the parties.

Dis-honour of a NI by nonacceptance
If drawee does not accept the bill within 48 hours from
the time of presentation.
If there are several drawees
Drawee is incompetent to contract
Drawee gives qualified acceptance
Drawee is a fictitious person
Dis-honour by non-payment
*maker of a note, acceptor of the bill makes default of
payment
* non-payment when presentation for payment is
excused
* overdue instrument remains unpaid

Notice of dis-honour
To be given by holder or any party or notice by
principal or his agent
Notice to all parties whom the holder seeks to
make liable or notice to party or his agent
Notice may be verbal/written or notice to be
given within reasonable time & place of business
Holder upon dishonour of the NI must inform all
parties
Holder of the instrument can bring the NI to the
notice of judiciary for redressal of his grievance

Crossing of cheque
Payment is obtained only through banker
General crossing word & co
Special crossing payment only through a
particular banker whose name appears on the
cheque
Restrictive crossing- crossing the words A/C
payee is used
Not negotiable crossing- the word Not
negotiable is used to protect against
miscarriage/dishonesty in the course of transit.

Rights & obligations of banker

Obligation to honour the cheque
To keep record of transaction
To abide by instructions of customer
Not to disclose customers a/c affairs
To charge incidental charges & interest as
per RBI approved rates

When Banker dishonours

customers cheque
Cheque is ambiguous & doubtful
It is mutilated
It is materially altered
It is not presented within limited time
Customers signature does not tally with
specimen signature
It is post dated
Cheque is presented in non-specified bank

Hundi
Indig be givenenous NI written in
vernacular
Hundi means to collect
Governed by local usages & customs
Notice of dishonour may not be given
It is illegal negotiable instrument
It operates without approval of RBI

The Sale of Goods Act, 1930

classification of goods
Existing goods- owned by seller at the time of sale
Specific goods- identified & agreed upon at the time of
contract for sale
Ascertained goods-goods become ascertainable after
formation of contract
Generic goods- not identified & agreed upon at the time
of arriving at contract of sale
Future goods-manufactured & acquired by seller after
making contract
Contingent goods-future goods which depend upon
contingency which may/may not happen

Condition & Warranty

Condition most essential for the main
purpose of sale.- non-fulfilment results in
failure to perform the contract& aggrieved
party can sue the other party.
Warranty- it is a stipulation which is
collateral to main purpose of contract- it is
an obligation though must be performed
but it is not vital.- if there is breach the
aggrieved party can claim damage.

Distinction between condition &

warranty
Condition stipulates main purpose of contractwarranty is collateral to main purpose.
In the event of breach, as per condition,
aggrieved party can repudiate the contract of
sale- in case of warranty, aggrieved party can
claim damage
Breach of condition is treated as breach of
warranty this happens when aggrieved party is
contented with damages only.

Passing of property
Goods must be ascertained
There should be intention of parties to sale
& buy.
When intention of parties cannot be
ascertained as to the time when thr goods
is to be passed to the buyer it cannot be
ascertained from the nature of contract

Rights of unpaid seller

If price is due or if he has immediate right
of action for the price or the instrument
has been dishonoured, the unpaid seller
can
* terminate lien
* stoppage of goods in transit
* claim damage
* Repudiate contract

Remedies for seller

Suit for price
Suit for non-acceptance by buyer
Suit for repudiation of contract by the
buyer before due date
Suit of interest

Remedies for buyer

Suit for damage for non-delivery of goods
Suit for specific performance
Suit for warranty
Suit for damage for repudiation of
contract by the seller before due date
Suit for interest.

Consumer Protection Act, 1986

This act applies all over India.
It applies to every type of goods & services
unless otherwise notified by the govt. of India.
This act has been enacted with the intention to
protect the interests of individual consumers by
making provisions for specific remedies to
prevent the loss or damage caused to
consumer as a result of unfair trade practices.

Objectives
To provide for better protection of interests of the
consumers
To make provisions for establishment of
Consumer Councils & other authorities for
settlement of consumer disputes & for matters
connected thereto.
To promote & protect the rights of consumers
To educate consumers about their legitimate
rights.

Rights of consumers
Right to be protected against marketing of
goods which are hazardous to life & property.
Right to be informed about quality, quantity,
purity & price of products
Right for protection against unfair trade practices
Right to be assured access to variety of goods
at competitive prices
Right to be heard about grievance at appropriate
forum
Right to consumer education

Important definitions
Consumer- A person who buys goods for which, for
consideration, the payment has been made
partly/fully/promised to be paid under Hire-purchase
scheme. It excludes persons who obtains goods for
resale or for commercial purpose.
Consumer dispute- It means a dispute where the person
against whom a complaint has been made, denies or
disputes the allegations contained in the complaint.
Unfair trade practice the trade practice which, for the
purpose of promoting the sale, use or supply of any
goods or for service, use unfair or deceptive practice.

Unfair trade practices

False representation of quality, quantity,
composition, grade, style
Falsely represents 2nd hand, renovated or old
goods as new goods
Falsy stating that the goods & services have
sponsorship, approval which goods /services do
not have.
Seller/supplier has a sponsorship of
approval/affiliation which he does not have.

Unfair trade practices

Giving false representation concerning need
for / usefulness of a product.
Giving warranty/guarantee of performance or
length of life of a product without proper tests.
Giving false promise to replace , maintain or
repair of an article
Misleading public concerning price at which the
product/goods/services have been sold.

Consumer Protection Council

>The Central govt. constitutes the council with* Minister-in-charge of consumer affair of union
govt. as chairman
* official & non-official members from different
sectors
At least one meeting in a year
They discuss right to be protected against
marketing of hazardous goods/services- right to
be informed about quality, quantity, purity &
price of products/services-unfair trade practicesaccess to goods/services at competitive prices

State Council
The state govt. constitutes the council with
minister-in-charge consumer affairs of
state govt. as Chairman & other official &
non-official members
They hold minimum 2 meetings in a year
State council holds business same as that
of Consumer Protection Council.

Dist. Consumer protection council

State govt. constitutes the district council
with Dist. Collector as Chairman and
official and non-official members.
They hold minimum 2 meetings in a year.
Functions are same as Central consumer
council at district level.

Filing complaint
No need of any fees for filing complaint
Complainant/representative can file the
complaint
Complaint to be sent by post to the appropriate
forum
Complaint should include name, description &
address of the complainant & opposite party
If compensation demanded is less than Rs. 5
lakhs, it should be filed with - Rs.5 lakhs + it
should be filed before state forum- Rs. 20 lakhs+
it should be filed before National Commission.

Available relief
> Removal of defects from the goods free
of cost
Replacement of goods free of cost
Refund of price paid
Award of compensation for loss or injury
suffered

WB Shops & Establishments Act,

1963
Employer person owning/having charges
of an establishment & includes an
agent/Manager or any person acting on
his behalf.
Commercial establishment- includes
corporate office/branch office
It covers office establishment located
inside factory.

Important provisions
central/state govt. establishment
Railway/airways/waterways/P&T etc.
Employees in managerial or confidential
capacity
Sales personnel/watchmen/care-taker
Establishment to remain closed for 1 &1/2
days every week
Employee can work for 8&1/2 hours/day or
48 hrs/week

Important provisions
Maximum daily hrs. including OT can be 10
hrs./day
Maximum OT hrs. can be 120 hrs./year
OT wages are paid @ double rate
Rest interval of 1 hr. after 5 hrs. work.
Women are allowed to work maximum upto
8 pm.
Child below 12 years of age not allowed to
work in establishment

Important provisions
PL 14 days/year
SL 14 days with pay/year
CL 10 days/year
PL can be accumulated up to 28 days
SL- can be accumulated up to 56 days
CL no accumulation
Termination of service after one years
continuous service- one months notice/pay in
lieu of notice

Registration of establishment
Employer to apply to registering authority
Name of employer
Postal address
Name of establishment
Weekly off day
Any other particular like number of employees as
per Rules
Registering officer allocates a Registration
number- certificate to be exhibited in the office
Changes in certificate to be intimated to
Registering officer within 7 days of change

The Patent Act, 1970

Patent is a monopoly right given to a
person for inventing a new & useful article
or an improvement of existing article or a
new process of making an article.
It gives exclusive right to manufacture new
article invented
Patent gives exclusive right to inventor for
a limited period only. Thereafter anybody
can make use of the invention.

The Patent Act, 1970

Exclusive marketing right is given for
patented medicines & drugs to the
patentee for a certain period.
Patentee must obtain license for
marketing the medicine & drug
If patent is granted to more than one
person, each of the co-owners will have
equal undivided share in the patent.

The Patent Act,1970

A patentee may surrender the patent
anytime to the Controller
The patentee can assign his patent to an
agent with the permission of Controller
The patent can not be copied or pirated. It
is an offense punishable under this Act.

The Competition Act, 2002

Objective is to prevent practices having adverse
effect on competition, to promote & sustain
competition in the market, to protect the
interests of consumers and to ensure freedom of
trade carried on by other participants in markets.
No enterprise shall enter into an agreement in
respect of production, supply, distribution,
storage, acquisition or control on competition of
goods/services which causes adverse effect in
India.

The competition Act, 2002

The authority under this act is commission
appointed by GOI.
It consists of a chairperson & 2-10
members appointed by GOI.
The commission can inquire into
agreements & officials of enterprise after
receipt of complaint, grant interim relief,
award compensation & impose penalty.

The Copyright Act, 1957

It applies all over India with regard to the
following Original literary, dramatic, musical &
artistic work
Cinematograph films
Sound recording
Architecture
Computer programme

The copyright Act. 1957

1st owner is absolute owner till he
relinquishes the right.
He can assign copyright in writing to his
legal heir
In case of any dispute regarding such
assignment, dispute will be referred to
Copyright board.
License is owned by copyright owner
Offences are punishable.

The trade Marks Act, 1999

Trade mark means a mark represented
graphically which distinguishes goods/services
of one person from those of others
The GOI appoints registrar & other officers as
Controller General of patents, Designs,& trade
marks
All trade marks are registered with the registrar.
All trade marks are registered for 10 years which
may be renewed from time to time

The Trade Marks Act, 1999

The trade mark may be assigned under
certain restrictions under this Act
The controller can cancel the trade mark if
found necessary under this Act.
Spurious trade mark is punishable and
such goods can be forfeited.
The Directors of a company using
spurious trade mark can be imprisoned