Business Laws Solved Question Papers
B.Com 1st Sem
Dibrugarh University
2017 (November) – Semester System
COMMERCE (General/Speciality)
Course: 102
(New course)
Business law
Full marks: 80
Pass marks: 24
Time: 3 hours
1.
(a) Choose the correct answer: 1x4=4
a)
The Indian Contract Act was passed in 1872/1873.
b)
Amount of a crossed cheque is not/ is paid at the counter.
c)
The Industrial Disputes Act was passed in 1947/1948.
d)
Public utility services do not include / include railway service.
(b) Write True and False: 1x4=4
a)
Agreement with a person of unsound mind is void. True
b)
A sale is an Executory contract. True
c)
The Consumer Protection Act recognizes eight
rights of a consumer. False
d)
The Bill of Exchange has three parties. True
2.
(a)
“No consideration, no contract.” Explain. Discuss the exceptions to this rule. 4+10=14
Ans: Consideration and Its Essentials
Section 2 (d) of Indian Contract Act, 1872,
defines consideration as “When at the desire of the promisor the promise or any
other person has done or abstained from doing or does or abstains from doing
something, such act abstinence or promise is called a consideration for the
promisor.”
Consideration is based on the term ‘quid-pro-quo’ which means ‘something in return’. When a person
makes a promise to other, he does so with an intention to get some benefit from
him. This act to do or to refrain from doing something is known as
consideration.
Consideration is an advantage or benefit which
moves from one party to another. It is the essence of bargain. It is the
reciprocal promise i.e. to do something or abstain from doing something in
return of a promise. It is necessary for an agreement to be enforceable by law.
In consideration both the parties give something & get something in return.
It may be in cash or kind.
Exceptions
to the rule ‘No consideration no contract’
The general rule is that an agreement made
without consideration is void. Section 25 deals with the exceptions to this
rule. In such cases the agreements are enforceable even though they are made
without consideration. These cases are:
a) Love
and Affection [Section 25(1)]: Where an agreement is expressed in writing
and registered under the law for the time being in force for the registration
of documents and is made on account of natural love and affection between the
parties standing in a near relation to each other, it is enforceable even if
there is no consideration.
For e.g. F, for natural love and affection, promises to give his son A, Rs. 1 Lac. F puts this promise in writing and registers it. This is a
contract.
b)
Compensation for voluntary services [Section 25(2)]: A
promise to compensate wholly or part a person, who has already voluntarily done
something for the promisor, is enforceable, even though without consideration.
A promise to pay for a past voluntary service is binding.
For e.g. A says to B’ At the risk of your life
you saved me from a serious accident. I promise to pay you Rs.1, 000.” There is
a contract between A and B even though there is no consideration.
c) Promise
to pay a time barred debt [Section 25(3)]: A promise by a debtor to pay a time
barred debt is enforceable provided it is made in writing and is signed by the
debtor or by his agent generally or specifically authorized in that behalf. The
debt must be such “of which the creditor might have enforced payment but for
the law for limitation of suits”
For e.g. D owes C Rs.1, 000 but the debt is
barred by the Limitation Act. D signs a written promise to pay C Rs.500 on
account of the debt. This is a valid contract.
d) Agency
(Section 185): No consideration is necessary to create an agency.
e)
Completed Gift (Explanation 1 to Section 25): The rule ‘No consideration no
contract’ does not apply to completed gifts. This rule shall not affect the
validity, as between donor and donee, of any gift actually made.
OR
(b) Discuss in brief
the various modes of discharge of a contract. 14
Ans:
Meaning of Discharge of a Contract:
Discharge of a contract means termination of the contractual
relations between the parties to a contract. A contract is said to be
discharged when the rights and obligations of the parties under the contract
come to an end.
Modes of
discharge of a contract: A Contract is said to be discharged when the
rights and obligations created by it come to an end. A contract may be
discharged in the following modes:-
a)
Discharge by performance: Discharge by performance takes place when the
parties to a contract fulfill their obligations arising under the contract
within the time and in the manner prescribed. Performance may be actual
performance or attempted performance.
b)
Discharge by Agreement or Consent: A Contract comes into existence by an
agreement and it may be discharged also by an agreement. The following are
modes of discharge of a contract by an agreement:
1) By Waiver: Waiver takes place when the parties to
a contract agree that they shall no longer be bound by the contract. For e.g. A
an actor promised to make a guest performance in the film made by B. Later B
forbids A from making the guest appearance. B is discharged of his obligation.
2) By Novation: Novation
occurs when a we contract is substituted for an existing contract, either
between the same parties or between different parties, the consideration being
the discharge of old contract, mutually. E.g.: A is indebted to B & C to C.
By mutual agreement B’s debt to C & B’s loan to A are cancelled & C
accepts as his debtor.
3) By Rescission:
Rescission of a contract takes place when all or some of the terms of the
contract are cancelled. It may occur by mutual consent or where one party fails
in the performance of his obligations, the other party may rescind the
contract.
4) By alteration:
Alteration of a contract may take place when one or more of the terms of the
contract is/are altered by mutual consent of the parties to the contract.
5) By Remission: Remission
means acceptance of a lesser fulfillment of the promise made, E.g. Acceptance
of a lesser sum than what was contracted for, in discharge of the whole of the
debt.
6) By Merger: Merger takes place when an inferior
right accruing to a party under a contract merges into a superior right
accruing to the same party under the same or some other contract. For e.g. P
holds a property under a lease. He later buys the property. His rights as a
lessee merge into his rights as an owner.
C) Discharge by impossibility of performance: If a
contract contains an undertaking to perform impossibility, it is void ab initio. As per Section 56,
impossibility of performance may fall into either of the following categories :
(i)
Impossibility existing at the time formation of the contract: This is
known as pre-contractual impossibility. The fact of impossibility may be:
a) Known
to the parties: Both the parties are aware or know that the contract is to
perform an impossible act. For e.g. A agrees with B to put life into dead wife
of B, the agreement is void.
b) Unknown
to the parties: Both the parties are unaware of the impossibility. The
contract could be on the ground of mutual mistake of fact. For e.g. contract to
sell his house at Andaman to B. Both the parties are in Mumbai and are unknown
to the fact that the house is actually washed away due to Tsunami.
(ii) Impossibility
arising subsequent to the formation of the contract: Where impossibility of
performance of the contract is caused by circumstances beyond the control of
the parties, the parties are discharged from further performance of the
obligation arising under the contract.
d)
Discharge by lapse of time: The
Limitation Act, 1963 lays down certain specified periods within which different
contracts are to be performed and be enforceable. If a party to a contract does
not perform, action can be taken only within the time specified by the Act.
Failing which the contract is terminated by lapse of time. For e.g. A sold a
gold chain to B on credit without any period of credit, the payment must be
made or the suit to recover it, must be instituted within three years from the
date of delivery of the instrument.
e)
Discharge by Operation of Law: A contract may be discharged
independently of the wished of the parties i.e. by operation of law. This
includes discharge:
1) By death: In contract involving personal skill
or ability, the contract is terminated on the death of the promisor. In other
contracts the rights and liabilities of a deceased person pass on to the legal
representatives of the deceased person.
2) By insolvency: When a
person is declared insolvent, he is discharged from all liabilities incurred
prior to such declaration.
3) By unauthorized material alteration of the
terms of a written agreement: Any material alteration made by a party to
the contract, without the prior permission of the other party, the innocent
party is discharged.
4) By rights and liabilities becoming vested in
the same person: When the rights and liabilities under a
contract vests in the same person.
f)
Discharge by Breach of Contract: A breach of contract occurs when a
party thereto without lawful excuse does not fulfill his contractual obligation
or by his own act makes it impossible that he should perform his obligation
under it. A breach to a contract occurs in two ways:-
1) Actual Breach: When a
party fails, or neglects or refuses or does not attempt to perform his
obligation at the time fixed for performance, it results in actual breach of
contract. For e.g. A promises to deliver 100 packs of ice-cream to B on his
wedding day. A does not deliver the packs on that day. A has committed actual
breach of the contract.
2) Anticipatory Breach: Anticipatory
Breach is a breach before the time of the performance of the contract has
arrived. This may take place either by the promisor doing an act which makes
the performance of his promise impossible or by the promisor, in way showing
his intention not to perform it.
3.
(a)
Elucidate the differences in between sale and agreement to sale. 14
Ans: Sale: Where
under a contract of sale, the property in the goods is immediately transferred
at the time of making the contract from the seller to the buyer; the contract
is called a 'sale' [Sec. 4(3)]. It refers to an absolute sale, e.g., an
outright sale on a counter in a shop. There is immediate conveyance of the
ownership and mostly of the subject-matter of the sale as well (delivery may
also be given in future). It is an executed contract.
An agreement to sell: Where
under a contract of sale, the transfer of property in the goods is to take
place at a future time or subject to some condition thereafter to be fulfilled,
the contract is called 'an agreement to sell' [Sec. 4(3)]. It is an Executory
contract and refers to a conditional sale.
Difference
between Sale and Agreement to Sale:-
Basis
|
Sale
|
Agreement to Sell
|
Definition
|
Where under a contract of sale, the property in the goods is
transferred from the seller to the buyer (i.e. at once); the contract is
called a ‘sale’.
|
where the transfer of the property in the goods is to take place
at a further time or subject to some condition thereafter to be fulfilled,
the contract is called an ‘agreement of sell’
|
Transfer of ownership
|
Transfer of ownership of goods takes place immediately.
|
Transfer of ownership of goods is to take place at a future time
or subject to fulfillment of some condition.
|
Executed contract or Executory contract
|
It is an executed contract because nothing remains to be done.
|
It is an Executory contract because something remains to be
done.
|
Conveyance of property
|
Buyer gets a right to enjoy the goods against the whole world
including seller.
|
Buyer does not get such right.
|
Transfer of risk
|
Transfer of risk of loss of goods takes place immediately
because ownership is transferred.
|
Transfer of risk of loss of goods does not take place because
ownership is not transferred.
|
Right of seller against the buyer’s breach
|
Seller can sue the buyer for the price, even though the goods
are in his possession.
|
Buyer can sue the seller for damages only.
|
Rights of buyer against the seller’s breach
|
Buyer can sue the seller for damages and can sue the third party
who bought those goods for goods.
|
Buyer can sue the seller for damages only.
|
Effect of insolvency of seller having possession of goods.
|
Buyer can claim the goods from the official receiver or assignee
because the ownership of goods has transferred to the buyer.
|
Buyer cannot claim the goods, even when he has paid the price
because the ownership has not transferred to the buyer. The buyer who has
paid the price can only claim rateable dividend.
|
Effect of insolvency of the buyer before paying the price.
|
Seller must deliver the goods to the official receiver or
assignee because the ownership of goods has transferred to the buyer. He can
only claim rateable dividend for the unpaid price.
|
Seller can refuse to deliver the goods unless he is paid full
price of the goods because the ownership has not transferred to the buyer.
|
Right in rem / personam
|
It is a right in rem i.e.
right against the whole world.
|
It creates a right in
personam i.e. right against a person.
|
In risk of destruction of goods.
|
Buyer has to bear the risk even if possession is with the seller
as ownership has passed.
|
Seller has to bear the risk, even if possession is with the
buyer, as ownership has not passed.
|
OR
(b) Describe the objectives of the Consumer
Protection Act, 1986. Who is a consumer according to the Consumer Protection
Act, 1986? 10+4=14
Ans: OBJECTIVES OF CONSUMER PROTECTION ACT, 1986: The main
objective of the act is to provide for better protection of consumers. Unlike
existing laws which are punitive or preventive in nature, the provisions of this Act are compensatory in nature. The act is
intended to provide simple, speedy and inexpensive redressal to the consumers'
grievances, and reliefs of a specific nature and award of compensation wherever
appropriate to the consumer.
The
objectives of the Consumer Protection Act are as follows:
1) To assist
countries in achieving or maintaining adequate protection for their population
as consumers;
2) To
facilitate production and distribution patterns responsive to the needs and
desires of consumers;
3) To
encourage high levels of ethical conduct for those engaged in the production
and distribution of goods and services to consumers;
4) To assist
countries in curbing abusive business practices by all enterprises at the
national and international levels which adversely affect consumers;
5) To
facilitate the development of independent consumer groups;
6) To further
international cooperation in the field of consumer protection;
7) To
encourage the development of market conditions which provide consumers with
greater choice at lower prices.
Consumer
Consumer: Section 2 (1) (d) of the Consumer
Protection Act, 1986 defines the term "consumer". It says ‘consumer’
means any person:
1)
Who buys goods and has paid or promised to pay a consideration
partly or fully under any system of deferred payment.
2)
Who hires or avails of services and has paid or promised to pay a
consideration partly or fully under any system of deferred payment.
3) Who uses
the goods with the approval of the person who has bought the goods for a
consideration
4) Who is a
beneficiary of the services hired or availed by an individual with the
consent of that individual?
Who is not
a consumer?
1) An
applicant for a passport has been held to be not a consumer, because the duties
of the passport officer do not fall in the category of services for
consideration.
2) An
applicant for ration card is not a consumer.
3)
The beneficiaries of municipal services have
been held to be not in the category of consumers.
4.
(a)
Define Bill of Exchange. Compare promissory note with bill of exchange. 4+10=14
Ans:
Bills of Exchange: A bill of
exchange or “draft” is a written order by the drawer to the drawee to pay money
to the payee. It is an unconditional order issued by a person or business which
directs the recipient to pay a fixed sum of money to a third party at a future
date. The future date may be either fixed or negotiable. A bill of exchange
must be in writing and signed and dated. Bills of exchange are used primarily
in international trade, and are written orders by one person to his bank to pay
the bearer a specific sum on a specific date.
As per Section 5 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 instrument.”
Difference
between bill of exchange and Promissory Note
Basis
|
Bill
of Exchange
|
Promissory
Note
|
Parties
|
There are 3 parties – drawee, drawer and payee.
|
There are 2 parties – maker or promisor and payee or promisee.
|
Drawer
|
It is drawn by
the creditor
|
It is drawn by
the debtor
|
Order or
Promise
|
It contains an
order to make payment. There can be three parties to it, viz. the drawer, the
Drawee and the payee.
|
It contains a
promise to make payment. There are only two parties to it, viz. the drawer
and the payee.
|
Acceptance
|
It requires
acceptance by the Drawee or someone else on his behalf.
|
It does not
require any acceptance.
|
Payee
|
Drawer and
payee can be the same party
|
Drawer cannot
be the payee of it
|
Set
|
A bill of exchange can be drawn in sets.
|
Promissory note cannot be drawn in sets.
|
Notice
|
The maker of the bill of exchange is secondarily and
conditionally liable to payee. He becomes liable to pay only when the drawee
refuses to honour the bill. Drawer stands in immediate relation to the drawee
or acceptor and not the payee.
|
The maker of the Promissory note is primarily and absolutely
liable to payee. Promisor stands in the immediate relation to the payee.
|
Notice
|
In case of its
dishonour due notice of dishonour is to be given by the holder to the drawer
|
No notice needs
to be given in case of its dishonour
|
OR
(b) Define
cheque. Compare bill of exchange with cheque. 4+10=14
Difference between cheque
and bills of exchange:
Basis
|
Cheque
|
Bills
of Exchange
|
Drawee
|
A cheque is always
drawn on a bank or banker.
|
A bill of exchange can be drawn on any person including a banker.
|
Acceptance
|
A cheque does not
require any acceptance.
|
A bill must be accepted before the Drawee can be made liable upon it.
|
Payment
|
A cheque is payable
immediately on demand without any days of grace.
|
A bill of exchange is normally entitled to three days of grace unless
it is payable on demand.
|
Stamp
|
A cheque does not
require any stamp.
|
A bill of exchange must be stamped.
|
Protection
|
A banker is given
statutory protection with regard to payment of cheques in certain
circumstances.
|
No such protection is available to the Drawee or acceptor of a bill of
exchange.
|
Crossing
|
A cheque may be
crossed.
|
Bill can never be crossed.
|
Presentment
|
If not presented to the banker for payment, it does not
discharge the drawer unless he suffers injury or damages.
|
Drawer is discharged, if bill is not presented for payment to
the acceptor.
|
Noting and Protesting
|
A cheque is not required to be noted or protested for dishonour.
|
A bill of exchange may be noted or protested for dishonour.
|
5.
(a)Define
strike and lockout. Discuss the general prohibitions on strike and
lockout. 3+3+8=14
Ans: Strike and Lockout
Strike: A strike is a
very powerful weapon used by trade unions and other labor associations to get
their demands accepted. It generally involves quitting of work by a group of
workers for the purpose of bringing the pressure on their employer so that
their demands get accepted. When workers collectively cease to work in a
particular industry, they are said to be on strike.
According to
Industrial Disputes Act 1947, a strike is “a cessation of work by a body of
persons employed in an industry acting in combination; or a concerted refusal
of any number of persons who are or have been so employed to continue to work
or to accept employment; or a refusal under a common understanding of any
number of such persons to continue to work or to accept employment”. This definition
throws light on a few aspects of a strike. Firstly, a strike is a referred to
as stoppage of work by a group of workers employed in a particular industry.
Secondly, it also includes the refusal of a number of employees to continue
work under their employer.
Lockout: A lockout is a
work stoppage in which an employer prevents employees from working. It is
declared by employers to put pressure on their workers. This is different from
a strike, in which employees refuse to work. Thus, a lockout is employers’
weapon while a strike is raised on part of employees. Acc to Industrial
Disputes Act 1947, lock-out means the temporary closing of a place of employment
or the suspension of work or the refusal by an employer to continue to employ
any number of persons employed by him.
A lockout may
happen for several reasons. When only part of a trade union votes to strike,
the purpose of a lockout is to put pressure on a union by reducing the number
of members who are able to work.
Section 22: Prohibition of Strikes and Lock outs:
1)
No person
employed in a public utility service shall go on strike, (a) without giving to
the employer notice of strike within six weeks before striking or (b) within fourteen
days of giving such notice or (c) before the expiry of the date of strike
specified in any such notice as aforesaid or (d) during the pendency of any
conciliation proceedings before a conciliation officer and seven days after the
conclusion of such proceedings.
2)
No employer
carrying on any public utility service shall lock-out any of his workman (a)
without giving them notice of lock-out within six weeks before locking-out; or
(b) within fourteen days of giving such notice; or (c) before the expiry of the
date of lock-out specified in any such notice as aforesaid; or (d) during the
pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
3)
The notice of lock-out or strike under this section
shall not be necessary where there is already in existence a strike or, as the
case may be, lock-out in the public utility service, but the employer shall
send intimation of such lock-out or strike on the day on which it is declared,
to such Authority as may be specified by the appropriate Government either
generally or for a particular area or for a particular class of public utility
services.
4)
The
notice of strike referred to in sub-section (1) shall be given by such number
of persons to such person or persons and in such manner as may be prescribed.
5)
The notice of lock-out referred to in
sub-section (2) shall be given in such manner as may be prescribed.
If on any day an employer receives
from any person employed by him any such notices as are referred to in
sub-section (1) or gives to any persons employed by him any such notices as are
referred to in sub-section (2), he shall within five days, thereof report to
the appropriate Government or to such authority as that Government may
prescribe the number of such notices received or given on that day.
Section 23: General Prohibition of Strikes and Lock-outs:
No workman who is
employed in any industrial establishment shall go on strike and no employer of
any such workman shall declare a lock-out
1) during the pendency of conciliation proceedings before a Board and
seven days after the conclusion of such proceedings;
2) during the pendency of proceedings before a Labour Court, Tribunal
or National Tribunal and two months after the conclusion of such proceedings
3) during any period in which a settlement is in operation,
OR
(b) Write notes
on: 7x2=14
(i) Layoff
Ans: Sec. 2 (kkk) defines “Lay-off”: Lay-off means the failure, refusal
or inability of an employer on account of shortage of raw materials, shortage
of power, excess of finished goods, no market demand for finished products etc.
Lay-off occurs while the establishment is continuing operation. In lay-off, the
employer is unable to provide employment to one or more workmen due to several
reasons generally genuine and owe to economic factors, viz. shortage of coal,
raw materials, excess production, shortage of electricity, break-down of
machinery, Government policy, no-demand of the finished products in the market,
shortage of finance, shortage of space in the storage, etc. Lay-off may be
applicable to a group of workers or to entire workers, or to the workers to one
shift, or some shifts, under certain circumstances.
(ii) Workman and its
ingredients according to the Industrial Disputes act, 1947
Ans: Workman:
'Workman" means any person (including an apprentice) employed in any
industry to do any manual, unskilled, skilled, technical, operational, clerical
or supervisory work for hire or reward, whether the terms of employment be
express or implied, .and for the purpose of any proceeding under this Act.
"Workman" does not include any such
person - (i) who is subject to the Air Force Act, 1950, or the Army Act, 1950,
or the Navy Act, 1957, or (ii) who is employed in the Police Service or as an
officer or other employee of a prison, or (iii) who is employed mainly in a
managerial or administrative capacity, or (iv) who, being employed in a
supervisory capacity, draws wages exceeding Rs. 1600/- per mensem, or exercises
functions mainly of management nature.
6.
Write
short notes on ( any four): 4x4=16
(a) Free
consent
Ans: Free Consent
Section 13 defines consent as “Two or more
persons are said to consent when they agree upon the same thing in the same
sense.” Consent of the party’s means, the parties to a contract must mean the
same thing in the same sense. It means ‘Consensus
ad idem’. For e.g. A have 2 cars – Maruti 800 and Maruti Zen. A offers
to sell the Maruti 800 while B accepts the offer thinking the car to be sold is
Maruti Zen. Here there is no consent.
Free consent refers to consent which has been
rendered by free will of the parties i.e. consent is voluntary. Section 10 of
the Act, specifically states that a contract is valid and enforceable if it is
made with the free consent of the parties.
Section 14 defines ‘Free Consent’ as – Consent
is said to be free consent when it is not caused by –
(i) Coercion, as defined in Section 15, or
(ii) Undue influence, as defined in Section
16, or
(iii) Fraud as defined in Section 17, or
(iv) Misrepresentation as defined in Section
18, or
(b) Right of consumer
Ans: Rights of Consumers:
1) The right
to safety: It refers to the right to be protected against products, production
processes and services which are hazardous to health or life. It includes
concern for consumers immediate and long term needs.
2) The right
to be informed: Consumers have a right to be informed about the quality, quantity,
potency, purity, standard and price of goods or services so that they can make
the right decision and protect themselves against malpractices.
3) The right
of choice: The consumer has the right to be assured of a choice of various goods
and services of satisfactory quality and competitive price.
4) Right to
representation (or right to be heard): It is a right and the responsibility of civil society to ensure consumer
interest prevails while formulating and executing policies which affect the
consumers, as well as right to be heard while developing or producing a product
or service.
5) Right to
seek redressal of grievances: The consumer has the right go to court if he has been unscrupulously
exploited against unfair or restrictive trade practices and receives
compensation for supply of unsatisfactory or shoddy goods.
6) The right
to consumer education: It is the right to acquire knowledge and skills to be an informed
consumer because it is easier for the literate to know their rights and to take
actions to influence factors that affect consumer’s decisions. The Union and
State Governments have accepted the introduction of consumer education in
school curriculum.
(c) Elements of
a contract of sale
Ans: According to Section 4 of the Sale of Goods Act, 1930, ‘A contract
of sale of goods is a contract whereby the seller transfers or agrees to
transfer the property in the goods to the buyer for a price.’
The term ‘Contract of sale’ is a generic term
and includes both a sale and an agreement to sell. Where under a contract of
sale, the property in the goods is transferred from the seller to the buyer
(i.e. at once), the contract is called a ‘sale’ but where the transfer of the
property in the goods is to take place at a further time or subject to some
condition thereafter to be fulfilled, the contract is called an ‘agreement of
sell’. [Section 4(3)].
The
essentials of a contract of sale are:-
1. Numbers of parties: Since a contract of
sale involves a change of ownership, it follows that the buyer and the seller
must be different persons. A sale is a bilateral contract. A man cannot buy
from or sell goods to himself. To this rule there is one exception provided for
in section 4(1) of the Sale of Goods Act. A part-owner can sell goods to
another part-owner. Therefore a partner may sell goods to his firm and the firm
may sell goods to a partner.
2. Goods: The subject-matter
of the contract of sale must be ‘goods’. According to Section 2(7) “goods means
every kind of movable property other than actionable claims and money; and
includes stock and shares, growing crops, grass, and things attached to or
forming part of the land which are agreed to be severed before sale or under
the contract of sale.” Goodwill, trademarks, copyrights, patents right, water,
gas, electricity,, decree of a court of law, are all regarded as goods. In the
case of land the grass which forms part of land have to be separated from the
land.
3. Price: The consideration for a contract of
sale is price. Price means money consideration. If it is anything other than
money, it will not be sale. But if the exchange is made partly for goods and
partly for price, it will still amount to sale. However, the price may be paid
or promises to be paid.
4. Transfer of property: 'Property' here means ownership.
Transfer of property in the goods is another essential of a contract of sale of
goods. A mere transfer of possession of the goods cannot be termed as sale. To
constitute a contract of sale the seller must either transfer or agree to
transfer the property in the goods to the buyer.
5. No formalities to be observed (Sec. 5): The sale
of Goods Act does not prescribe any particular form to constitute a valid
contract of sale. A contract of sale of goods can be made by mere offer and
acceptance. The offer may be made either by the seller or the buyer and the
same must be accepted by the other. Neither payment nor delivery is necessary
at the time of making the contract of sale.
6. Includes both a ‘sale’ and
‘an agreement to sell’: The term ‘contract of sale’ is a generic term and
includes both a ‘sale’ and an ‘agreement to sell’.
7. Other essential elements: A
contract for the sale of goods must satisfy all the essential elements
necessary for the formation of a valid contract, e.g., the parties must be
component to contract, there must be free consent, there must be consideration,
the object must be lawful etc.
(d) Crossing of
cheques
Ans: Crossing of a cheque: A cheque is said to be crossed when
two parallel transverse line with or without any words are drawn on the left
hand corner of the cheque. The negotiability of a cheque doesn’t affect for
crossing. Crossing of a cheque refers to the instruction to the banker relating
to the payment of the cheque. A crossing is the direction to the paying banker
that the cheque should be paid only to a banker. Crossing of cheque is very
safety because the holder of the cheque is not allowed to cash it across the
counter. A crossed cheque provides protection not only to the holder of the
cheque but also to the receiving and collecting bankers.
The
following parties can cross a cheque:
1. The
Drawer: The drawer of a cheque may cross a cheque before issuing it. He may
cross it generally or specially.
2. The
Holder: The holder of a cheque can cross in the following way:
Ø
The holder may cross an open cheque generally or
specially.
Ø
The holder may specially cross a generally
crossed cheque.
Ø
The holder may add the words “Not-Negotiable” in
a generally or specially crossed cheque.
3. The
Banker: The banker to whom the cheque is crossed specially may again cross it
especially to another banker's agent, for collection. This is called double
special crossing.
(e) Types of
contract
Ans: Types of Contracts: A contract is of various types which
are given below:
a) VALID CONTRACT: Valid contract is that which is enforceable at law. It
creates legal obligations between the parties. It enables one party to compel
another party to do something or not to do something. In case of valid contract
all the parties to the contract are legally responsible for the performance of
a contract. If one party breaks the contract other has right to be enforced
through the court.
b) VOID CONTRACT: "An agreement not enforceable at law is a void contract".
Originally it is a valid contract but due to certain reasons it becomes void
after its formation. A void contract cannot be enforced by either party. In this case the
parties are not legally responsible to fulfill the contract. If any party has
received any benefit is bound to return. This contract takes place when consent
of one of the parties is not free.
c) VOIDABLE CONTRACT: An agreement, which is enforceable by law at the option of one
more of the parties, but not at the option of the other (s), is a voidable
contract.
(f) Industrial dispute
Ans: Industrial Dispute: An industrial dispute may be defined as a
conflict or difference of opinion between management and workers on the terms
of employment. It is a disagreement between an employer and employees'
representative; usually a trade union, over pay and other working conditions
and can result in industrial actions. When an industrial dispute occurs, both
the parties, that is the management and the workmen, try to pressurize each
other. The management may resort to lockouts while the workers may resort to
strikes, picketing or gheraos.
As per Section
2(k) of Industrial Disputes Act, 1947, an industrial dispute in defined as any
dispute or difference between employers and employers, or between employers and
workmen, or between workmen and which is connected with the employment or
non-employment or the terms of employment or with the conditions of labor, of
any person.
(Old course)
(Business Regulatory Framework)
Full marks: 80
Pass marks: 32
1.
Choose the correct answer: 1x8=8
(a) Offer and acceptance make contract/ agreement.
(b) The Indian Contract Act was passed in 1772/ 1872.
(c) To execute a contract of sale, price is not
essential / essential element.
(d) Implied warranties are not written/ written in a
contract of sale.
(e) Days of grace is counted/ not counted in cheque.
(f) Bill of Exchange and promissory note are same/ not
same
(g) The Consumer Protection Act was passed in 1985/
1986
(h) FEMA came into force from June 1, 1999/2000
2.
(a) Explain the essential elements of a valid
contract. 11
OR
(b) Discuss the elements of a valid consent. 11
3.
(a) Discuss the essential elements of the Sale
of Goods Act, 1930. 11
OR
(b) Elucidate the rights of unpaid seller upon goods. 11
4.
(a) Discuss in detail the characteristics of
negotiable instruments. 11
OR
(b) Analyze the elements of promissory note. 11
5.
(a) Describe the composition of District Forum. 11
OR
(b) Explain the rights of consumer according to the
Consumer Protections Act, 1986. 11
6.
(a) Write the obligations of exporter of goods
and services under the FEMA, 2000
12
OR
(b) Write notes on: 6x2=12
1)
Reserve Bank of India
2)
Authorized person.
7.
Write short notes on (any four) 4x4=16
(a) Voidable agreements
(b) Coercion
(c) Future goods
(d) Crossed cheque
(e) State forum
(f) Quasi contract
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