Académique Documents
Professionnel Documents
Culture Documents
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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There is a general and universal rule – “Ignorance of law is not the excuse”. Hence
working knowledge of rules and law is very essential. This set of notes tries to simplify various basic
provisions of different Commercial / Business / Mercantile Acts and Rules as applicable to any type
and form of business establishment.
Mercantile/Business Laws are laws consisting of rules relating to business and its transactions. These
laws govern and regulate trade, industry and commerce.
Law generally means a code of conduct so designed to control, maintain order, give justice, reduce
inequality and for the welfare of the society members. Law is generally equal for all and to be
respected by all.
1. Offer & Acceptance: There must be two parties to an agreement i.e. one party making the offer
& other party accepting it. The terms of the offer must be definite & the acceptance of the offer must
be absolute & unconditional. The acceptance must be communicated.
2. Intention to create Legal relationship: When two parties enter into an agreement, their intention
must be to create legal relationship between them. Agreement of social or domestic nature are not
legal relationship.
4. Capacity of parties / competency: Every person must be competent to enter into valid contract
i.e. he (a) is of the age of majority (b) is of sound mind (c) is not disqualified by any law.
5. Free & Genuine Consent: The consent of the parties is said to be free when they are of the same
mind on all the material terms of contract. The parties are said to be of the same mind when they
agree about the subject matter of contract in the same sense and at same time. Consent obtained by
fraud, mistake, force, influence, coercion, etc… is invalid / illegal.
6. Lawful Object: The object of the agreement must be lawful. In other words, it means that the
object must not be (a) illegal (b) immoral or (c) opposed to public policy , like :
a. trading with enemy, b. Marriage brokering agreement, c. encouraging unnecessary litigation,
d. to bribe or influence justice, e. to withdraw legal proceedings, h. agreements with terrorists, i.
Agreement creating monopoly, j. Trafficking ( illegal trading.), -----Æ
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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k. Agreement interfering parental duties, l. Agreement to do something that is opposed to public
duty, m. agreement in restrain of : trade, marriage, legal proceedings, public auction.
7. Agreement not declared as void: The agreement must not have been expressly declared void by
any law in force in the country
a. Unlawful object, b. without consideration, c. in restrain of marriage, d. in restrain of trade,
e. in restrain of legal proceedings, f. wagering agreement, g. incompetent persons.
8. Certainty and possibility of performance: The agreement must be certain & not vague or
indefinite. If it is vague and it is not possible to ascertain its meaning, it cannot be enforced.
9. Legal Formalities: A contract may be words spoken or written. In some cases the document in
which contract is incorporated is to be stamped & registered. Thus where there is a statutory
requirement to be made in writing or in the presence of witness or registered, the required statutory
formalities must be complied with compulsorily. ( Eg. Land & Building Agreements.)
10. Two or more parties to contract : There must be two or more parties to contract. One person is
the proposal maker ( promisor ) and the other is the acceptor of proposal ( promisee ).
2. Sue for specific performance : The affected party can sue for its performance.
3. Sue for Injunction : meaning stay order, matter frozen as it is, no further action.
5. Sue for Damages : Asking for compensation through the court of law.
Quasi Contracts :
Normally a contract is illegal and void if all the parts of Sec. 10, i.e. essential elements are NOT
followed. However, in the interest of justice and fairness, some special contracts are considered as
valid even if some essential conditions are not fulfilled, such as :
To sum up :
Proposal + Acceptance = Promise.
Promise + Consideration = Agreement.
Agreement + Enforceable by law = Contract.
Thus, all contracts are agreement but all agreements are not necessarily contracts.
It can be in case of existing and specific It can be mostly in case of future and
goods only. contingent goods.
If the goods are destroyed, the loss is of If the goods are destroyed, the loss is of
the buyer even tough the goods are in the the seller even tough the goods are in
possession of the seller. the possession of the buyer.
If the buyer fails to pay the price of the If there is a breach of contract by the
goods or if there is breach of contract by buyer, the seller can only sue for
the buyer, the seller can sue for the price damages and not the price even though
even though the goods are in his the goods are in the possession of the
possession. buyer.
The seller cannot re-sell the goods. If he The seller can re-sell the goods. The
does so the subsequent buyer does not buyer who takes the goods for
acquire title to the goods. consideration gets a good title.
The aggrieved party can repudiate ( The aggrieved party can claim damages
cancel ) the contract of sale & also sue only & he cannot cancel the contract.
for damages.
A breach of condition may be treated as A breach of warranty cannot be treated
a breach of warranty and can cancel as breach of condition and cannot
the contract. cancel the contract.
It goes direct to root or substance of the It does not go direct to the root of
contract. It is fundamental in nature. contract. It is of subsidiary or inferior
character.
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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This means, “let the buyer beware” i.e. in a contract of sale of goods the seller is under no duty to
reveal unflattering truths about the goods sold. Therefore, when a person buys goods, he must
examine them thoroughly. If the goods turn out to be defective and makes a bad selection, he cannot
blame anybody excepting himself.
1. Fitness for buyer’s purpose: Where the buyer expressly makes known to the seller the
particular purpose for which he requires the goods & relies on the seller’s skill or judgement and the
goods are of a description which is in the course of the seller’s business to supply, then the seller must
supply the goods which shall be fit for the buyer’s purpose.
2. Sale under a patent or trade name: In the case of a contract for the sale of a specified article
under its patent or other trade name, there is no implied condition that the goods shall be reasonably
fit for any particular purpose.
3. Mercantile quality: Where goods are brought by description from a seller who deals in goods of
that description, there is an implied condition that the goods shall be of merchantable quality. But if
the buyer has examined the goods, there is no implied condition as regards defects which such
examination ought to have revealed.
5. Consent by fraud: Where the consent of the buyer, in a contract of sale, is obtained by the seller
by fraud or where the seller knowingly conceals a defect which could not be discovered on a
reasonable examination, the doctrine of caveat emptor does not apply.
2.Goods: There must be some goods, the property in which is or is to be transferred from the seller to
the buyer. The goods which form the subject matter of the contract of sale must be movable. Transfer
of immovable property is not regulated by the Sale of Goods Act.
3.Price: The consideration for the contract of sale called price, must be money. When goods are
exchanged for goods, it is not a sale but a barter. There is, however, nothing to prevent the
consideration from being partly in money & partly in goods / kind.
4.Transfer of general property: There must be a transfer of general property as distinguished from
special property in goods from the seller to buyer.
5.Essential elements of a valid contract: All the essential elements of a valid contract must be present
in the contract of sale as per Sec. 10 of the Indian Contract Act, 1872.
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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2. Suit for damages for non-acceptance : where the buyer wrongfully neglects or refuses to accept
and pay for the goods, the seller may sue him for non-acceptance. Damages will have to be paid.
3. Repudiation of contract before due date : where the buyer repudiates the contract before the date
of delivery, the seller may either; (a) treat the contract as subsisting & wait till the date of delivery, or
(b) he may treat the contract as rescinded / cancelled & sue for the damages for the breach.
4. Suit for interest : where there is a specific agreement between the seller & the buyer as to interest
on price of the goods from the date on which payment become due, the seller may recover interest
from the buyer. If however there is no specific agreement to this effect, the seller may charge interest
on the price when it becomes due from such day as he may notify to the buyer.
Implied Conditions:
1.Condition as to title : In a contract of sale there is an implied condition on the part of the seller that
(a) In case of sale, he has a right to sell the goods, and (b) in the case of an agreement to sell, he will
have a right to sell the goods at the time when the property is to pass.
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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2.Sale by description : Where there is a contract for the sale of goods by description, there is an
implied condition that the goods shall correspond with the description. If the sale is by sample as well
as by description, the goods shall correspond both with the sample and the description.
3.Condition as to quality or fitness : The condition as to quality or fitness is implied where (a) the
goods sold are such as the seller deals in the ordinary course of his business (b) the buyer relies on the
seller’s skill or judgement as to the fitness of the goods for any particular purpose ; and (c) the buyer
expressly makes known to the seller that he wants the goods for that particular purpose.
4.Condition as to merchantability : Where goods are bought by description from a seller who deals in
goods of that description, there is an implied condition that the goods shall be of merchantable
quality. Where the buyer has examined the goods, there is no implied condition as regards defects
which such examination ought to have revealed.
5.Condition implied by custom : An implied condition as to quality or fitness for particular purpose
may be annexed by the usage of trade.
6.Sale by sample : In the case of a contract for sale by sample there is an implied condition (a) that the
bulk shall correspond with the sample in quality (b) that the buyer shall have a reasonable
opportunity of comparing it with sample.
7.Condition as to wholesomeness: In the case of eatables and provisions, in addition to the implied
condition as to merchantability, there is another implied condition that the goods shall be wholesome.
The term negotiable instrument as such is not defined in the Negotiable Instrument Act, 1881, but
Section 13, of the Act gives its meaning. According to it, a negotiable instrument means a promissory
note, a bill of exchange or a cheque. Thus, this Act recognises only three instruments as negotiable
instrument. But it does not prohibit to include other instruments in the category of negotiable
instrument which satisfy the conditions of negotiability. These conditions are :
a. The instrument should be freely transferable either by delivery or by endorsement & delivery.
b. The person, who gets or obtain in good faith & for value, gets it free from all defects & its
entitled to recover the money of the instrument in his own name.
c. Eg. – D.D., Shares, Bearer Debentures, Treasury bills, Railway receipts, etc….
1. for Consideration: that every negotiable instrument, was made or drawn for consideration, and that
every such instrument, when it has been accepted, endorsed, transferred for consideration.
2. as to date: that every negotiable instrument bearing a date was made or drawn on such date.
3. as to time of acceptance: that every accepted bill of exchange was accepted within a reasonable time
after its date & before its maturity.
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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4. as to time of transfer: that every transfer of a negotiable instrument was made before its maturity
5. as to order of endorsement: that the endorsements appearing upon negotiable instrument were made
in the order in which they appear thereupon.
7. as to a holder in due course: that every holder of a negotiable instrument is a holder in due course.
In both the case, he must receive the instrument without having sufficient cause to believe that any
defect existed in the title of the person from whom he derived his title. In other words, holder in due
course means a holder who takes the instrument for value and before it is overdue, and without any
notice of defects in the title of person, who transferred it to him.
Thus a person who claims to be ‘holder in due course’ is required to prove that:
1.on paying a valuable consideration, he become the possessor of the instrument if payable.
2.he had come into the possession of the instrument before the amount due is actually payable.
3.he had come to possess the instrument without having sufficient cause to believe that any defect
existed in the title of transferor from whom he derived his title.( He must hold it in good faith.)
4.he has the right to receive or recover the amount that is due.
B. Cheque :
1. Drawer, 2. Drawee, 3. Payee, ( 4. Holder : Payee or Endorsee.)
C. Bill of Exchange :
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Only for I.I.P.M. Students. Legal Systems. MBA. Page no. - 8 -
By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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Types of companies :
Director :
Directors are agents of the Company in transactions they enter into on behalf of the Company,
though they are not agents for individual shareholders or members. A director may be an employee, a
servant or even a "worker" of the Company. He occupies the position of a trustee, in respect of the
Company’s properties and funds.
Director’s liability arises because of their position as agents or officers of the Company as also for
being in the position of trustees or having fiduciary relation with the Company or its shareholders.
Winding Up of Co. :
Two types : 1. Voluntary winding-up. 2. Compulsory winding-up by court.
GOODS :
According to Consumer Protection Act of 1986, “goods mean goods as defined in the Sale of
Goods Act of 1930.” means every kind of movable property
SERVICE :
A very comprehensive definition of the word “service” is given. “service” means service of
any description which is made available to users and includes, banking, financing, insurance,
transport, processing, supply of electrical or other energy, boarding or lodging or both,
construction of houses, entertainment, amusement or the purveying of news or other
information, but it does not include rendering of any service free of charge or under a
contract of personal service”.
CONSUMER DISPUTE :
A consumer dispute is very important from the view point of the Consumer Protection Act,
If there is any dispute between the consumer and manufacturer or trader, as the case may be,
the consumer gets the right to seek remedy or filing the complaint under the Act.
COMPLAINT / COMPLAINANT :
The word ‘complaint’ implies allegation or formal accusation. The intention of filing a
complaint should be to obtain a relief under the consumer protection act. complaint means
any allegation in writing made by a complainant that:
1. An unfair / restrictive trade practice has been adopted by trader or service provider.
2. The goods bought or agreed to be brought suffer from one or more defects.
3. The services hired or availed or agreed to be hired suffer from deficiency.
4. A trader or the service provider, has charged a price in excess of the MRP price.
CONTENTS OF A COMPLAINT :
The complainant in person or his agent has to present his complaint as mentioned below :
1. The name, description and the address of the complainant.
2. The name, description and the address of the opposite party or parties.
3. The facts relating to the complaint and when and where i.e. time and place it arose.
4. Documents in support of the allegations contained in the complaint.
5. The relief that the complainant claims.
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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Appeal to the Supreme Court [Sec. 23]
Any person aggrieved, may make an appeal to the Supreme Court against the order passed
by the National Commission within 30 days from the date of the order.
Digital Signature : Since online or internet based transaction and documentation cannot
have physical signature on paper, a digital signature has to be OBTAINED from a
registered authority as per law and use it for such cyber transaction to authenticate the
documents, cheques, papers, agreements that are online and on net.
It any person mis-uses or does any illegal activity concerning online, internet or cyber
related, then he shall be punishable under this act which may be a jail term as well as fine.
Many Govt. agencies and Tax Dept. are now using digital data and records and encourage
citizens to file online documents, payments and returns.
It deals with the protection to the owner and inventor of his intellectual property with legal
rights – including movable property / things, immovable things, creation of property by
using human mind and intellect. Like : literature work, art, music, phonogram, industrial
design, service mark, scientific discovery, etc…
PATENT : It is an exclusive right given to the owner to control use of his own creation
and give legal permission to use his design, product, service, procedure, etc.. and can
demand price for the same from the user. Generally patent mark registration is valid for 20
years from registration date, and extendable after re-application.
COPYRIGHT : Its importance came up when printing industry started to grow. It gives
authority and right to the owner of any form of written, programme, sound, film or musical
form to refrain others from copying it and mis-using his creation. Generally its registration
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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is valid for 10 years to 50 years as per type and rules, from registration date, and
extendable after re-application.
The amendments in 1999 and 2000 came in due to international convention and
agreements under T.R.I.P.s ( Trade Related Intellectual Property Rights.)
Such persons registering under I.P.R. protection can legally get ROYALTY for allowing
others to use his intellectually developed own creation and help control its use.
There are Central as well as State level Pollution Control Boards to effectively control and
monitor pollution primarily by the industry and business houses.
The Govt. Authority has Rights and Powers to enter and inspect any business premises and
obtain information and take samples and get analysis report thereby directing such
polluting unit owner or imposing fines for the same.
P.T.O.
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By : Prof. Rumy Mehta. ( M.Com, MMS, MPM, LL.B, C.S.(Int.), D.T.L, D.B.M, D.L.L, D.I.R, D.I.Psy.)
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Please see next sheet for the Students’ Lions Club form….
Member Status: ■ New Member ■ Existing Member Member Number (If existing): ___________________________________
________________________________________________________________________________________________________________
First Name Last Name
________________________________________________________________________________________________________________
E-mail Address
■ Student (Through Age 30) ■ Student Over Age 30 (Joining a Campus Club)
Enrollment: ID CS TR BL OT Enrollment: ID CS TR BL OT
(Circle key code, see below)
Age: DR SC BC PP OT
(Circle key code, see below) Students over age 30 and joining a Campus Lions club or
campus club branch pay a reduced charter/entrance fee
Students through age 30 joining a Lions club receive a of US$10. Regular international dues apply.
charter/entrance fee waiver and pay only half international
dues. Students joining a new Campus Lions club, or a club
with a majority of student members, must prepay US$19.50
to cover one year of international dues.
Key Codes
Proof of Enrollment Verification of Age
ID - Student Identification Card DR - Drivers License
CS - Class Schedule SC - State Identification Card
TR - Transcript BC - Birth Certificate
BL - Bill PP - Passport
OT - Other OT - Other
Certification
By signing this form, you are certifying that you are the current district governor, guiding Lion or club secretary and have verified
the above member is a student. Additionally, if the said student is a charter member of a new Campus Lions club, or club with a
majority of students, you confirm that prepayment of dues (US$19.50) is enclosed for each student.
(Please print)
District Governor, Guiding Lion or Club Secretary’s Name: ______________________________________ Date: _____________________
Key points to remember when filling out the Student Member Certification Form:
• The Student Member Form must be submitted with the charter application for new clubs or with the Monthly Membership
Report (MMR) for existing clubs, otherwise full charter/entrance fees and international dues will be charged. Certification
may also be completed online using the WMMR for students through age 30.
• All information requested must be provided, otherwise certification will be delayed.
• Date of birth is required.
• Key codes are provided so as to facilitate accurate and consistent reporting of 1) enrollment in an educational institution
and 2) document verifying age.
US$19.50
Students through the age of 30 US$0 US$0
(Prepaid for new clubs)
Charter club send with application to: Existing clubs send with Monthly Membership Report to:
Membership Programs and New Clubs Marketing Department Club Officer and Record Administration Department
Lions Clubs International Lions Clubs International
300 W. 22nd Street 300 W. 22nd Street
Oak Brook, IL 60523 USA Oak Brook, IL 60523 USA
Fax: 630.571.1691 Fax: 630.571.1687
E-mail: newclubs@lionsclubs.org E-mail: stats@lionsclubs.org
STU-5 6/10