Business Laws Solved Question Papers | Nov' 2017 | Dibrugarh University

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.
(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:-
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’.
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.
(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: 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
Bill of Exchange
Promissory Note
There are 3 parties – drawee, drawer and payee.
There are 2 parties – maker or promisor and payee or promisee.
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.
It requires acceptance by the Drawee or someone else on his behalf.
It does not require any acceptance.
Drawer and payee can be the same party
Drawer cannot be the payee of it
A bill of exchange can be drawn in sets.
Promissory note cannot be drawn in sets.

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.
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
(b) Define cheque. Compare bill of exchange with cheque.     4+10=14
Difference between cheque and bills of exchange:
Bills of Exchange
A cheque is always drawn on a bank or banker.
A bill of exchange can be drawn on any person including a banker.

A cheque does not require any acceptance.
A bill must be accepted before the Drawee can be made liable upon it.
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.

A cheque does not require any stamp.

A bill of exchange must be stamped.
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.

A cheque may be crossed.
Bill can never be crossed.
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,

(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
(b) Discuss the elements of a valid consent.                  11
3.       (a) Discuss the essential elements of the Sale of Goods Act, 1930.            11
(b) Elucidate the rights of unpaid seller upon goods.              11
4.       (a) Discuss in detail the characteristics of negotiable instruments.       11
(b) Analyze the elements of promissory note.       11
5.       (a) Describe the composition of District Forum.              11
(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
(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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