ADL 12: BUSINESS LAW: ASSIGNMENT A Q1 Explain the essential elementsof a valid contact.

Ans: Essentials of a valid contract: You enter into contracts day after day. Taking a seat in a bus amounts to entering into a contract. When you put a coin in the slot of a weighing machine, you have entered into a contract. We go to a restaurant and take snacks, we have entered into a contract. In such tpe of situations we do not even realise that we are making a contract. In the case of people engaged in business, they enter into thousands of contracts. The law relating to contracts is to be found in the indian contract act. 1872. A contract is defined as an agreement enforceable by law. There are some more elements which are essential to constitute a valid contract . these are: i. to constitute a contract there must be an agreement between two parties. And agreement is composed of two elements-offer and acceptance. The party making the offer is known as the offeror, the party to whom the offer is made is known as the offeree. ii. There should be an intention to creat a legal relationship on the part of the parties making the agreement. An agreement of a purely social or domestic nature is not a contract. iii. Thr consent of the parties to enter into a contract must be free and genuine. The consent of the parties should not be obtained ycoercion, undue influence, fraud, misrepresentation or mistake if the consent is obtained byany of these flaws, then the contract is not valid. iv. The parties to a contract should be competent to enter into a contract. The flaw in the capacity maybe due to minority, lunacy etc. v. The agreement must be supported by consideration on both sides. Each party to the agreement must give or promise to give something, and receive something or a prmisse in return. Consideration is the price for which the promise of the other is sought. However, consideration need not be in terms of money. In case the contract is not supported by consideration, then it is not enforeable by law. vi. The object of the agreement must be lawful and not one of which the law disapproves. vii. There are certain agreements which have been expressly declared illegal or void by the law. In such cases , even if the agreement possesses all the essential elements of a valid agreement it will not be enforceable by law. viii. The meaning of the agreement must be certain or capable of being made certain, otherwise the agreement will not be enforceable by law. ix. Thr terms of the agreement should be capable of performance. An agreement to do an act impossible in itself, cannot be enforced. x. A contract maybe oral or written. If however, a particular type of contract is required by law to be in writing, it must comply with the necessary formalities as to writing, registration and attestation , if

necessary, if these legal formalities are not carried out , then the contract is not enforceable by law. Q 2: Enumerate the different remedies for breach of a contract. Explain one of the remedies. Ans: Remedies for breach of contract: A contract may be discharged byPerformance or tender, Mutual consent, Subsequent impossibility, Operation of law or Breach of contract. As soon as either party commits a breach of the contract, the other party becomes entitles to any of the following remedies(i) rescission of the contract. (ii) damages for the loss sustained or suffered. (iii)a decree for specific performance (iv) an injunction (v) suit on quantum meuit. We shall now explain one of the five remediesRescission of the contract: when a breach of a contract is committed by one party, ther other party may sue to treat the contract as rescinded. In such a case, the aggrieved party is freed from all his obligations under the contract. Q 5: Explain the implied conditions and warrantee in a contract for sale of goods. Ans: conditions and warranties: in a contract of sale, parties make certain stipulations, i.e., agree to certain terms. All stipulations are not treated on the same footing. Some may be intended by the parties to be of a fundamental nature. E.g. quality of the goods to be supplied, the breach of which, therefore, will be regarded as a breach of the whole contract. Some stipulations may be intinded by the parties to be binding, but of a subsidiary or inferior character e.g. time of payment, so that a breach of this term will not put an end to the contract but will make the party committing the breach, liable to damages,the former stipulations are called conditions and the latter warranties. Thus a condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. A warranty on the other hand is defined as a stipulation collateral to the main purpose of the contract. The breach of which gives rise to a claim for damages, but not to a right to reject the goods and tereat the contract as repudiated. Thus the effect of a breach of a condition would be if the buyer has paid the price, he can claim the refund of price plus damages for the breach. On the other hand, in case of breach of warranty the buyer can clamim damages only and he must accept the goods. The conditions and warranties may be either express or implied. They are said to be express when the terms of the contract expressly privide for them. They are said to be implied when the law deems their existence in the contract even without their actually having been put in the

contract. However, an implied condition or a warranty may be excluded by an express term to the contrary in the contract. The express condition or warranaty may be of any kind that the parties to the contract may choose to agree upon e.g. it may be agreed tha the buyer will not sell the goods below a certain price, that the deliveryshall be made or taken on or before a certain date. Similarly, in a contract of sale of a car, express warranty as to its soundness may be incorporate. The implied conditions and warranties are deemd to be incorporated in every contract of sale of goods unless the terms of the conract show contrary intentions.

Business Law:Assignment B Q 1: Define a bill of exchange. Explain the salient features of a bill of exchange. Ans: A bill of exchange is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instruement. From this definition, the following characterstics of a bill of exchange emerge: (i) it contains and order to pay, (ii) the order to pay must be unconditional ,(iii) the sum payable must be definite ,(iv) it may be drawn payable to beared, (v) it cannot be made payable to beared on demand, (vi) it requires acceptance by the drawee unless payable on demand, (vii) it is dishonoured by non acceptance or by non payment (viii) it must be stamped. Specimen of a Bill of Exchange Rs 10,000 New Delhi-110010 August 20,2008

Six months after date pay to me or order the sum of rupees ten thousant only for value received. To Mr Khan Address.. . Manish

Q 2: Explain some of the more important general principles of insurance. Ans: General principles of insurance: insurance transactions are conducted upon certain fundamental principles.these are described as follows:i. Indemnity: the contract of insurance is essentially a contract of indemnity and except for life insuracnce the insurer contracts to indemnify the insured for actual loss incurred. ii. Good faith: The insured is under an oblication to make the full disclored of all such facts which may have some bearing on the decision of the insurer to enter into contract of insurance.

iii. Insurable interest: The insured must have an insurable interrest in the object or life insured. Such an interest must always be a pecuniary or financial interest. Iv Cause Proxima or the Proximate cause: when a loss has resulted due to two or more causes, we have to look to the promimate or the nearest cause of the loss, although the loss might not have taken place without the remote cause. v Mitigation of Loss: in the event of some mishap to the insured property, the insured must act as though uninsured and make reasonable efforts to save the insured property. vi Subrogation: the underwriter (or insurer) after paying to the insured for the loss, steps into the shoes of the insured with regard to all the rights that the insured may have against a third party and with regard to any benefit arising therefrom. vii Contribution: in case a property is insured with more than one insurer, and a loss takes place, then the assured will get compensation only for the amount of actual loss. The insurers will share the burden of payment in proportion to the amount insured by each. viii Re-insurance: reinsurance means that the insurer insures the same risk with some other insurance companies with a view to spread and share risk with others. Thus if a companyaccepts insurance risk for sums beyond its means, a portion of such risk is reinsured with some other insurance companies, at a lower rate of premium: which is less than that received from the person efffecting the original insurance, so that the original insurance companymay pass on some risk of insurance to other insurance companies, and also may get some profit from the difference between the two premia. Q 3: Describe the rights and duties of an arbitrator.

Ans: Rights: i to conduct the arbitral proceedings in the manner in which he considers appropriate. ii to determine the place of arbitation having regard to the circumstance of the case including the convenience of the parties. iii to determine the time frame for filing statements of claim by the claimant and the defense bythe respondent. iv to appoint one or more experts to report on specific issues to be determined by the Tribunal

to take a courts assistance in taking evidence

vi to fix the costs of an arbitration.

Duties: (i) to satisfyhimself tat the disputes which are dealt with are within the scop of the arbitration. (ii) to act judicially and impartially by (a) giving a fair hearing to the parties (b) not communicating secretly with any party. (c) giving an opportunity to parties to substantiate their respective claims (iii) to encourage settlement of the dispute by mediatio or conciliation (iv) to be withing the scope of the arbitration agreement. ADL 12: BUSINESS LAW (ASSIGNMENT C) Q1 Q4 Q7 Q10 Q13 Q16 Q19 Q22 Q25 Q28 Q31 Q34 Q37 Q40 True True True False False True False True True False False False True True Q2 Q5 Q8 Q11 Q14 Q17 Q20 Q23 Q26 Q29 Q32 Q35 Q38 Q41 False False False True False False False False False True True True True False Q3 Q6 Q9 Q12 Q15 Q18 Q21 Q24 Q27 Q30 Q33 Q36 Q39 Q42 True False False True False True True True True False False False True False