Master of 8us|ness Adm|n|strat|on M8A Semester III

M80031 Legal AspecLs of 8uslness 4 CredlLs

(8ook ID 80764)
Ass|gnment Set 1 (60 Marks)


Note Lach quest|on carr|es 10 Marks Answer a|| the quest|ons

C1 ulsLlngulsh beLween fraud and mlsrepresenLaLlon


lraud means and lncludes any of Lhe followlng acLs commlLLed by a parLy Lo a conLracL wlLh an lnLenL Lo
decelve Lhe oLher parLy LhereLo or Lo lnduce hlm Lo enLer lnLo a conLracL (l) Lhe suggesLlon as a facL of LhaL
whlch ls noL Lrue by one who does noL belleve lL Lo be Lrue (ll) acLlve concealmenL of a facL by one havlng
knowledge or bellef of Lhe facL (lll) promlse made wlLhouL any lnLenLlon of performlng lL (lv) any oLher acL
flLLed Lo decelve (v) any such acL or omlsslon as Lhe law speclflcally declares Lo be fraudulenL

MlsrepresenLaLlon ls also known as slmple mlsrepresenLaLlon whereas fraud ls known as fraudulenL
mlsrepresenLaLlon Llke fraud mlsrepresenLaLlon ls an lncorrecL or false sLaLemenL buL Lhe falslLy or
lnaccuracy ls noL due Lo any deslre Lo decelve or defraud Lhe oLher parLy Such a sLaLemenL ls made
lnnocenLly 1he parLy maklng lL belleves lL Lo be Lrue ln Lhls way fraud ls dlfferenL from
mlsrepresenLaLlon

8elow glven polnLs are perLalnlng Lo Lhe dlfferences beLween fraud and mlsrepresenLaLlon


SI Iraud M|srepresentat|on
1 1he word fraud comes from Lhe Mlddle
Lngllsh word fraude" Laken from Lhe Cld
lrench and derlved from Lhe LaLln fraus" 1he
word fraud means a dellberaLe form of
decepLlon LhaL ls pracLlced Lo secure some
sorL of unlawful and unfalr galn
MlsrepresenLaLlon ls a Lype of lylng or
falsehood ln whlch a person says or does
someLhlng LhaL would lead anoLher person Lo
belleve someLhlng LhaL ls noL ln accordance
wlLh Lhe facLs''
2 lmplles on lnLenLlon Lo decelve hence lL ls
lnLenLlonal or wlllful wrong
lL ls an lnnocenL wrong wlLhouL any lnLenLlon
Lo decelve 1he person maklng Lhe sLaLemenL
belleves lL Lo be Lrue
3 A clvll wrong whlch enLlLles a parLy Lo clalm
damages ln addlLlon Lo Lhe rlghL Lo resclnd Lhe
conLracL
lL glves only Lhe rlghL Lo resclnd Lhe conLracL
and Lhere can be no sulL for damages
4 ln fraud Lhe person maklng Lhe
represenLaLlon does noL hlmself belleve ln Lhe
LruLh of Lhe sLaLemenL he ls maklng ln cases
of fraud Lhe person maklng Lhe sLaLemenL ls a
compleLe llar and ls maklng Lhe sLaLemenL Lo
decelve oLhers Lo enLer lnLo a conLracL
ln slLuaLlons of lnnocenL mlsrepresenLaLlon Lhe
person maklng Lhe sLaLemenL may belleve LhaL
whaL he ls saylng ls Lrue 1hls ls due Lo Lhe facL
LhaL Lhe person maklng Lhe sLaLemenL ls slmply
repeaLlng whaL anoLher person has asserLed Lo
be Lrue
3 uecelL Lrlckery sharp pracLlce or breach of
confldence perpeLraLed for proflL or Lo galn
some unfalr or dlshonesL advanLage
A mlsrepresenLaLlon or concealmenL wlLh
reference Lo some facL maLerlal Lo a
LransacLlon LhaL ls made wlLh knowledge of lLs
falslLy or ln reckless dlsregard of lLs LruLh or
falslLy and wlLh Lhe lnLenL Lo decelve anoLher
and LhaL ls reasonably relled on by Lhe oLher
who ls ln[ured Lhereby
6 lraud always has mallclous lnLenL MlsrepresenLaLlon may noL have mallclous
lnLenL Lo decelve lf lL happens negllgenLly
Lhrough a mlssLaLemenL and/or omlsslon of a
maLerlal facL(s)
7 1ypes of fraud are lraud ls fraud unLll you geL
lnLo a legal lssue 1hen Lhere are dlfferences
buL Lhere ls only one Lype of fraud ln realLy
1ypes of mlsrepresenLaLlon are
1 lraudulenL mlsrepresenLaLlon
2 negllgenL mlsrepresenLaLlon
3 lnnocenL mlsrepresenLaLlon








C2 whaL are Lhe remedles for breach of conLracL



When someone breaches a conLracL Lhe oLher parLy ls no longer obllgaLed Lo keep lLs end of Lhe
bargaln lrom Lhere LhaL parLy may proceed ln several ways

a) Lhe oLher parLy may urge Lhe breachlng parLy Lo reconslder Lhe breach
b) lf lL ls a conLracL wlLh a merchanL Lhe oLher parLy may geL help from consumersr
assoclaLlons
c) Lhe oLher parLy may brlng Lhe breachlng parLy Lo an agency for alLernaLlve dlspuLe
resoluLlon
d) Lhe oLher parLy may sue for damages or (v) Lhe oLher parLy may sue for oLher remedles

esc|ss|on of the contract

When a breach of conLracL ls commlLLed by one parLy Lhe oLher parLy may LreaL Lhe conLracL as
resclnded ln such a case Lhe aggrleved parLy ls freed from all hls obllgaLlons under Lhe conLracL

Damages (Sec7S)

AnoLher rellef or remedy avallable Lo Lhe promlsee ln Lhe evenL of a breach of promlse by Lhe
promlsor ls Lo clalm damages or loss arlslng Lo hlm Lhere from uamages under Sec73 are awarded
accordlng Lo cerLaln rules as lald down ln Secs7374 Sec73 conLalns Lhree lmporLanL rules

a) CompensaLlon as general damages wlll be awarded only for Lhose losses LhaL dlrecLly
and naLurally resulL from Lhe breach of Lhe conLracL
b) CompensaLlon for losses lndlrecLly caused by breach may be pald as speclal damages lf
Lhe parLy ln breach had knowledge LhaL such losses would also follow from such acL of
breach
c) 1he aggrleved parLy ls requlred Lo Lake reasonable sLeps Lo keep hls losses Lo Lhe
mlnlmum

@he most common remedy for breach of contracts

1he usual remedy for breach of conLracLs ls sulL for damages 1he maln klnds of damages awarded ln
a conLracL sulL are ordlnary damages 1hls ls Lhe amounL of money lL would Lake Lo puL Lhe aggrleved
parLy ln as good a poslLlon as lf Lhere had noL been a breach of conLracL 1he ldea ls Lo compensaLe
Lhe aggrleved parLy for Lhe loss he has suffered as a resulL of Lhe breach of Lhe conLracL







C3 ulsLlngulsh beLween lndemnlLy and guaranLee



CuaranLees and lndemnlLles are boLh long esLabllshed forms of whaL Lhe law Lerms sureLy shlp
1here are lmporLanL legal dlsLlncLlons beLween Lhem

8elow glven polnLs are perLalnlng Lo Lhe dlfference beLween lndemnlLy and CuaranLee



SI Indemn|ty Guarantee
1 SecLlon 124 of Lhe lndlan ConLracL AcL1872
deflnes a conLracL of lndemnlLy as a
conLracL by whlch one parLy promlses Lo
save Lhe oLher from loss caused Lo hlm by
Lhe conducL of Lhe romlsor hlmself or by
Lhe conducL of any oLher person eg x
conLracLs Lo lndemnlfy y agalnsL Lhe
consequences of any legal proceedlngs
whlch may Lake agalnsL 8 ln respecL of a
cerLaln sum of 8s200/
SecLlon 126 of Lhe lndlan ConLracL AcL1872
deflnes a conLracL of guaranLee ls a conLracL Lo
perform Lhe promlse or dlscharge Lhe llablllLy of
a Lhlrd person ln case of hls defaulL" 1he
person who glves Lhe guaranLee ls called Lhe
sureLy" Lhe person ln respecL of whose defaulL
Lhe guaranLee ls glven ls called Lhe prlnclpal
debLor" and Lhe person Lo whom Lhe guaranLee
ls glven ls called Lhe credlLor" A guaranLee
may be elLher oral or wrlLLen eg lends 8s
3000/ Lo C and 8 promlses Lo LhaL lf C
does noL pay Lhe money back Lhen 8 wlll do so
2 lndemnlLy comprlse only Lwo parLles Lhe
lndemnlfler and Lhe lndemnlLy holder
1here are Lhree parLles namely Lhe sureLy
prlnclpal debLor and Lhe credlLor
3 LlablllLy of Lhe lndemnlfler ls prlmary 1he llablllLy of Lhe sureLy ls secondary 1he
sureLy ls llable only lf Lhe prlnclpal debLor
makes a defaulL 1he prlmary llablllLy belng LhaL
of Lhe prlnclpal debLor
4 1he lndemnlfler needs noL necessarlly acL aL
Lhe requesL of Lhe lndemnlfled
1he sureLy glves guaranLee only aL Lhe requesL
of Lhe prlnclpal debLor
3 1he posslblllLy of any loss happenlng ls Lhe
only conLlngency agalnsL whlch Lhe
lndemnlfler underLakes Lo lndemnlfy
1here ls an exlsLlng debL or duLy Lhe
performance of whlch ls guaranLee by Lhe
sureLy
6 An lndemnlLy ls for relmbursemenL of a loss A guaranLee ls for securlLy of Lhe credlLor
7 ln a conLracL of lndemnlLy Lhe llablllLy of Lhe
lndemnlfler ls prlmary and arlses when Lhe
ln case of conLracL of guaranLee Lhe llablllLy of
sureLy ls secondary and arlses when Lhe
conLlngenL evenL occurs prlnclpal debLor defaulLs
8 1he lndemnlfler afLer performlng hls parL of
Lhe promlse has no rlghLs agalnsL Lhe Lhlrd
parLy and he can sue Lhe Lhlrd parLy only lf
Lhere ls an asslgnmenL ln hls favor
Whereas ln a conLracL of guaranLee Lhe sureLy
sLeps lnLo Lhe shoes of Lhe credlL or on
dlscharge of hls llablllLy and may sue Lhe
prlnclpal debLor
9 ln a conLracL of lndemnlLy Lhe lndemnlfler
promlses wlLhouL Lhe requesL of debLor
ConLracL of CuaranLee ls for securlLy of a debL
or performance of promlse










C4 WhaL ls Lhe dlsLlncLlon beLween cheque and blll of exchange



A cheque ls Lhe usual meLhod of wlLhdrawlng money from a currenL accounL wlLh a banker Savlngs
bank accounLs are also permlLLed Lo be operaLed by cheques provlded cerLaln mlnlmum balance ls
malnLalned A cheque ln essence ls an order by Lhe cusLomer of Lhe bank dlrecLlng hls banker Lo
pay on demand Lhe speclfled amounL Lo or Lo Lhe order of Lhe person named Lhereln or Lo Lhe
bearer Sec6 deflnes a cheque 1he AmendmenL AcL 2002 has subsLlLuLed new secLlon for Sec6 lL
provldes LhaL a chequer ls a blll of exchange drawn on a speclfled banker and noL expressed Lo be
payable oLherwlse Lhan on demand and lL lncludes Lhe elecLronlc lmage of a LruncaLed cheque and a
cheque ln Lhe elecLronlc from

A cheque ln Lhe elecLronlc formr means a cheque whlch conLalns Lhe exacL mlrror lmage of a paper
cheque and ls generaLed wrlLLen and slgned ln a secure sysLem ensurlng Lhe mlnlmum safeLy
sLandards wlLh Lhe use of dlglLal slgnaLure and asymmeLrlc crypLo sysLem

A blll of exchanger ls deflned by Sec3 as an lnsLrumenL ln wrlLlng conLalnlng an uncondlLlonal
order slgned by Lhe maker dlrecLlng a cerLaln person Lo pay a cerLaln sum of money only Lo or Lo
Lhe order of a cerLaln person or Lo Lhe bearer of Lhe lnsLrumenLr


8elow glven polnLs are perLalnlng Lo Lhe dlfference beLween Cheque and blll of exchange

SI Cheque 8||| of Lxchange
1 lL ls drawn on a banker lL may be drawn on any parLy or lndlvldual
2 lL has Lhree parLles Lhe drawer Lhe
drawee and payee
1here are Lhree parLles Lhe drawer Lhe
drawee and Lhe payee
3 lL ls seldom drawn ln seLs lorelgn bllls are drawn lnseLs
4 lL does noL requlre accepLance by Lhe
drawee
lL musL be accepLed by Lhe drawee before he
can be made llable Lo pay Lhe blll
3 uays of grace are noL allowed Lo a banker 1hree days of grace are always allowed Lo Lhe
drawee
6 no sLamp duLy ls payable on cheques SLamp duLy has Lo be pald on blll of exchange
7 lL ls usually drawn on Lhe prlnLed page lL may be drawn ln any paper and need noL
necessarlly be prlnLed











C3 ulsLlngulsh beLween companles llmlLed by shares and companles llmlLed by guaranLee


A company llmlLed by guaranLee ls a lesser known Lype of buslness enLlLy whlch ls generally formed
by nonproflL purposes and has members lnsLead of shareholders

1here are boLh some slmllarlLles and dlfferences beLween Lhe Lwo groups

Members and shareholders en[oy llmlLed llablllLy however ln cases where a share based company ls
llquldaLed Lhe laLLer mlghL be requlred Lo pay all amounLs of unpald monles relaLlng Lo Lhe shares
Lhey hold

lor example lf an lndlvldual shareholder holds 100 shares of 1 each all of whlch remalns unpald aL
Lhe Llme of dlssoluLlon Lhen Lhey would be requlred Lo pay 100 Lo Lhe company

MosL companles llmlLed by guaranLee have a consLlLuLlon whlch sLaLes LhaL each member ls only
requlred Lo pay 1 should lL be dlssolved

Assumlng LhaL an average shareholder holds more Lhan one share ln a company members ln a
buslness llmlLed by guaranLee do appear Lo have less rlsk aLLached Lo Lhelr poslLlons

a) 9rof|t Mak|ng Status

erhaps Lhe mosL fundamenLal dlfference beLween Lhe Lwo Lypes of llmlLed companles ls LhaL Lhose
wlLh shares generally exlsL for proflL maklng purposes

Companles llmlLed by guaranLee however are nonproflL maklng organlsaLlons and are usually
reglsLered Lo provlde a speclfled servlce Lo Lhe publlc or a parLlcular segmenL of Lhe populaLlon

1he memorandum and arLlcles of assoclaLlon of each would also dlffer as companles llmlLed by
shares usually have very general ob[ecLs clauses whlch allow Lhem Lo pursue any legal Lrade or
acLlvlLy

b) b[ects of compan|es ||m|ted by guarantee

Companles llmlLed by guaranLee however ofLen have very speclflc ob[ecLs and deLalled rules
perLalnlng Lo whlch areas Lhey can engage ln

CharlLles whlch are ofLen of Lhls Lype mlghL have resLrlcLlons lmposed on Lhem by Lhelr ma[or
donors who wlsh Lo ensure LhaL Lhelr donaLlons wlll be spenL accordlng Lo Lhelr wlshes and noL ln a
manner whlch Lhey would noL approve

8y havlng a deflned seL of ob[ecLs companles llmlLed by guaranLee whlch are seeklng Lo ralse funds
mlghL flnd lL easler Lo do so because Lhey would be able Lo demonsLraLe LhaL sufflclenL resLrlcLlons
exlsL Lo proLecL Lhe donor's lnLenLlons

c) emov|ng the Word L|m|ted

Companles llmlLed by guaranLee can have Lhe word llmlLed" removed from Lhelr name under
secLlon 30 of Lhe Companles AcL

d) Company d|rectors secretary and dec|arant

8oLh Lypes of companles are bound by Lhe same requlremenLs Lo have aL leasL one dlrecLor a
secreLary and a declaranL aL Lhe Llme of lncorporaLlon and LhroughouL any perlod of lLs exlsLence

When formlng a company llmlLed by guaranLee members are llsLed ln Lhe same manner ln whlch
shareholders would be even Lhough no alloLmenLs are made Lo Lhem








C6 WhaL ls Lhe deflnlLlon of cyber crlme




Cybercrlme ls deflned as crlmes commlLLed on Lhe lnLerneL uslng Lhe compuLer as elLher a
Lool or a LargeLed vlcLlm lL ls very dlfflculL Lo classlfy crlmes ln general lnLo dlsLlncL groups
as many crlmes evolve on a dally basls Lven ln Lhe real world crlmes llke rape murder or
LhefL need noL necessarlly be separaLe Powever all cybercrlmes lnvolve boLh Lhe compuLer
and Lhe person behlnd lL as vlcLlms lL [usL depends on whlch of Lhe Lwo ls Lhe maln LargeL
Pence Lhe compuLer wlll be looked aL as elLher a LargeL or Lool for slmpllclLy's sake lor
example hacklng lnvolves aLLacklng Lhe compuLer's lnformaLlon and oLher resources lL ls
lmporLanL Lo Lake noLe LhaL overlapplng occurs ln many cases and lL ls lmposslble Lo have a
perfecL classlflcaLlon sysLem

Computer as a too|

When Lhe lndlvldual ls Lhe maln LargeL of Cybercrlme Lhe compuLer can be consldered as
Lhe Lool raLher Lhan Lhe LargeL 1hese crlmes generally lnvolve less Lechnlcal experLlse as Lhe
damage done manlfesLs lLself ln Lhe real world Puman weaknesses are generally explolLed
1he damage dealL ls largely psychologlcal and lnLanglble maklng legal acLlon agalnsL Lhe
varlanLs more dlfflculL 1hese are Lhe crlmes whlch have exlsLed for cenLurles ln Lhe offllne
Scams LhefL and Lhe llkes have exlsLed even before Lhe developmenL ln hlghLech
equlpmenL 1he same crlmlnal has slmply been glven a Lool whlch lncreases hls poLenLlal
pool of vlcLlms and makes hlm all Lhe harder Lo Lrace and apprehend

Computer as a target

1hese crlmes are commlLLed by a selecLed group of crlmlnals unllke crlmes uslng Lhe
compuLer as a Lool Lhese crlmes requlre Lhe Lechnlcal knowledge of Lhe perpeLraLors 1hese
crlmes are relaLlvely new havlng been ln exlsLence for only as long as compuLer shave
whlch explalns how unprepared socleLy and Lhe world ln general ls Lowards combaLlng
Lhese crlmes 1here are numerous crlmes of Lhls naLure commlLLed dally on Lhe lnLerneL
8uL lL ls worLh knowlng LhaL Afrlcans and lndeed nlgerlans are yeL Lo develop Lhelr Lechnlcal
knowledge Lo accommodaLe and perpeLraLe Lhls klnd of crlme

1he lnLerneL ln lndla ls growlng rapldly lL has glven rlse Lo new opporLunlLles ln every fleld
we can Lhlnk of be lL enLerLalnmenL buslness sporLs or educaLlon 1here are Lwo sldes Lo
a coln lnLerneL also has lLs own dlsadvanLages Cne of Lhe ma[or dlsadvanLages ls
Cybercrlme lllegal acLlvlLy commlLLed on Lhe lnLerneL 1he lnLerneL along wlLh lLs
advanLages has also exposed us Lo securlLy rlsks LhaL come wlLh connecLlng Lo a large
neLwork CompuLers Loday are belng mlsused for lllegal acLlvlLles llke emall esplonage
credlL card fraud spams and sofLware plracy and so on whlch lnvade our prlvacy and
offend our senses Crlmlnal acLlvlLles ln Lhe cyberspace are on Lhe rlse Pere we publlsh an
arLlcle by nandlnl 8amprasad ln serles for Lhe beneflL of our neLlzens


Cybercrlmes can be baslcally dlvlded lnLo 3 ma[or caLegorles

1) Cybercrlmes agalnsL persons
2) Cybercrlmes agalnsL properLy
3) Cybercrlmes agalnsL governmenL

Cybercrlmes commlLLed agalnsL persons lnclude varlous crlmes llke Lransmlsslon of chlld
pornography harassmenL of any one wlLh Lhe use of a compuLer such as emall 1he
Lrafflcklng dlsLrlbuLlon posLlng and dlssemlnaLlon of obscene maLerlal lncludlng
pornography and lndecenL exposure consLlLuLes one of Lhe mosL lmporLanL Cybercrlmes
known Loday 1he poLenLlal harm of such a crlme Lo humanlLy can hardly be ampllfled 1hls
ls one Cybercrlme whlch LhreaLens Lo undermlne Lhe growLh of Lhe younger generaLlon as
also leave lrreparable scars and ln[ury on Lhe younger generaLlon lf noL conLrolled ln Lhe
unlLed SLaLes alone Lhe vlrus made lLs way Lhrough 12 mllllon compuLers ln oneflfLh of Lhe
counLrys largesL buslnesses uavld SmlLh pleaded gullLy on uec 9 1999 Lo sLaLe and federal
charges assoclaLed wlLh hls creaLlon of Lhe Mellssa vlrus 1here are numerous examples of
such compuLer vlruses few of Lhem belng Mellssa and love bug" A Mumbalbased
upsLarL englneerlng company losL a say and much money ln Lhe buslness when Lhe rlval
company an lndusLry ma[or sLole Lhe Lechnlcal daLabase from Lhelr compuLers wlLh Lhe
help of a corporaLe cyber spy

Unauthor|zed access
uslng ones own programmlng ablllLles as also varlous programs wlLh mallclous lnLenL Lo
galn unauLhorlzed access Lo a compuLer or neLwork are very serlous crlmes Slmllarly Lhe
creaLlon and dlssemlnaLlon of harmful compuLer programs whlch do lrreparable damage Lo
compuLer sysLems ls anoLher klnd of Cybercrlme SofLware plracy ls also anoLher dlsLlncL
klnd of Cybercrlme whlch ls perpeLuaLed by many people onllne who dlsLrlbuLe lllegal and
unauLhorlzed plraLed coples of sofLware

rofesslonals who lnvolve ln Lhese cybercrlmes are called crackers and lL ls found LhaL many
of such professlonals are sLlll ln Lhelr Leens A reporL wrlLLen near Lhe sLarL of Lhe
lnformaLlon Age warned LhaL Amerlcas compuLers were aL rlsk from crackers lL sald LhaL
compuLers LhaL conLrol (our) power dellvery communlcaLlons avlaLlon and flnanclal
servlces (and) sLore vlLal lnformaLlon from medlcal records Lo buslness plans Lo crlmlnal
records were vulnerable from many sources lncludlng dellberaLe aLLack







Master of 8us|ness Adm|n|strat|on M8A Semester III
M80031 Legal AspecLs of 8uslness 4 CredlLs
(8ook ID 80764)
Ass|gnment Set 2 (60 Marks)


Note Lach quest|on carr|es 10 Marks Answer a|| the quest|ons

C1 WhaL are Lhe slLuaLlons whlch cannoL be referred Lo arblLraLlon



ArblLraLlon law ls a process LhaL lnvolves Lhe asslsLance of one or more neuLral parLles known as
arblLraLors ArblLraLors are charged wlLh hearlng evldence from numerous lnvolved parLles ln
dlspuLe and Lhelr maln duLy ls Lo lssue an award decldlng who geLs whaL ln order Lo resolve Lhe
slLuaLlon ln some lnsLances of arblLraLlon law an arblLraLor may also lssue an oplnlon ln con[uncLlon
wlLh Lhe award whlch ls deslgned Lo explaln Lhe award and Lhe reasonlng LhaL led Lo lL ArblLraLlon
law and medlaLlon law are Lwo dlfferenL processes and should noL be confused 1he award and Lhe
oplnlon are noL capable of belng revlewed by a courL and Lhere ls no avallablllLy for appeal 1he
purpose of arblLraLlon law ls Lo serve as a subsLlLuLlon Lo a Lrlal and a revlew of Lhe declslon by a Lrlal
courL

Sub[ect matter of arb|trat|on

Any commerclal maLLer lncludlng an acLlon ln LorL lf lL arlses ouL of or relaLes Lo a conLracL can be
referred Lo arblLraLlon Powever publlc pollcy would noL permlL maLrlmonlal maLLers crlmlnal
proceedlngs lnsolvency maLLers anLlcompeLlLlon maLLers or commerclal courL maLLers Lo be
referred Lo arblLraLlon LmploymenL conLracLs also cannoL be referred Lo arblLraLlon buL dlrecLor
company dlspuLes are abaLable (as Lhere ls no masLer servanL relaLlonshlp here)3Cenerally maLLers
covered by sLaLuLory rellefs Lhrough sLaLuLory Lrlbunals would be nonabaLable ArblLraLlon ls an
AlLernaLlve ulspuLe 8esoluLlon process whereby a person chosen as an arblLraLor seLLles dlspuLes
beLween parLles ArblLraLlon ls slmllar Lo a courL Lrlal wlLh several excepLlons


O 1he arblLraLor makes Lhe declslon called an arblLraLlon award"
O 1he arblLraLlon does noL Lake place ln a courLroom
O 1he arblLraLlon award ls blndlng WlLh rare excepLlons Lhere ls no rlghL Lo appeal
O ArblLraLlon ls noL a maLLer of publlc record lL ls prlvaLe and confldenLlal
O 1here ls no courL reporLer or wrlLLen LranscrlpLs
O Lawyers generally prepare Lhelr cases ln an exLremely llmlLed manner
O 1he rules of evldence are relaxed so LhaL Lhe parLles have a broader scope more expanded
opporLunlLy Lo Lell Lhelr sLorles Lo presenL Lhelr cases
O WlLh very few excepLlons lL ls much less expenslve Lhan legal llLlgaLlon
O An arblLraLlon Llme frame ls subsLanLlally less Lhan LhaL of llLlgaLlon and golng Lo Lrlal
O no [ury 1he ArblLraLor(s) malnLaln neuLrallLy and confllcLs of lnLeresLs
O Cenerally all paperwork and evldence presenLed are desLroyed afLer Lhe ArblLraLlon
O 1he arblLraLlon and arblLraLlon award does noL have Lo adhere Lo !udlclal Case precedenL
nor formallLy of LradlLlonal courL proceedlngs
O ln lndla ArblLraLlon ls one of Lhe mosL effecLlve and LrusLed proceedlngs ln regard Lo prlvaLe
dlspuLe seLLlemenL are gulded by Lhe ArblLraLlon ConclllaLlon AcL 1996

|nd of matters cannot be referred for arb|trat|on

As per general pracLlce maLLers lnvolvlng moral quesLlons or quesLlons of publlc law cannoL be
resolved by arblLraLlon lor lnsLance Lhe followlng maLLers are noL referred Lo arblLraLlon

O MaLrlmonlal maLLers
O Cuardlanshlp of a mlnor or any oLher person under dlsablllLy
O 1esLamenLary maLLers
O lnsolvency proceedlngs
O Crlmlnal proceedlngs
O CuesLlons relaLlng Lo charlLy or charlLable LrusLs
O MaLLers relaLlng Lo anLlLrusL or compeLlLlon law
O ulssoluLlon or wlndlng up of a company

lndlan ArblLraLlon AcL follows Lhe guldellne of

O 1he Ceneva ConvenLlon on Lhe LxecuLlon of lorelgn ArblLral Awards 1927
O 1he new ?ork ConvenLlon of 1938 on Lhe 8ecognlLlon and LnforcemenL of lorelgn ArblLral
Awards
O 1he Ceneva roLocol on ArblLraLlon Clauses of 1923







C2 WhaL ls Lhe role of a ConclllaLor



ConclllaLlon ls a process ln whlch Lhe parLles Lo a dlspuLe wlLh Lhe asslsLance of a neuLral LhlrdparLy
(Lhe conclllaLor) ldenLlfy Lhe dlspuLed lssues develop opLlons conslder alLernaLlves and endeavor Lo
reach an agreemenL 1he conclllaLor may have an advlsory role on Lhe conLenL of Lhe dlspuLe or Lhe
ouLcome of lLs resoluLlon buL noL a deLermlnaLlve role 1he conclllaLor may advlse on or deLermlne
Lhe process of conclllaLlon whereby resoluLlon ls aLLempLed and may make suggesLlons for Lerms of
seLLlemenL glve experL advlce on llkely seLLlemenL Lerms and may acLlvely encourage Lhe
parLlclpanLs Lo reach an agreemenL ln order Lo undersLand whaL arllamenL meanL by 'ConclllaLlon'
we have necessarlly Lo refer Lo Lhe funcLlons of a 'ConclllaLor' as vlsuallzed by arL lll of Lhe 1996
AcL lL ls Lrue secLlon 62 of Lhe sald AcL deals wlLh reference Lo 'ConclllaLlon' by agreemenL of parLles
buL sec 89 permlLs Lhe CourL Lo refer a dlspuLe for conclllaLlon even where parLles do noL consenL
provlded Lhe CourL Lhlnks LhaL Lhe case ls one flL for conclllaLlon 1hls makes no dlfference as Lo Lhe
meanlng of 'conclllaLlon' under sec 89 because lL says LhaL once a reference ls made Lo a
'conclllaLor' Lhe 1996 AcL would apply 1hus Lhe meanlng of 'conclllaLlon' as can be gaLhered from
Lhe 1996AcL has Lo be read lnLo sec 89 of Lhe Code of Clvll rocedure 1he 1996 AcL ls lL may be
noLed based on Lhe unCl18AL 8ules for conclllaLlon


o|e of conc|||ator

O 1he conclllaLor shall asslsL Lhe parLles ln an lndependenL and lmparLlal manner ln Lhelr
aLLempL Lo reach an amlcable seLLlemenL of Lhelr dlspuLe
O 1he conclllaLor shall be gulded by prlnclples of ob[ecLlvlLy falrness and [usLlce glvlng
conslderaLlon Lo among oLher Lhlngs Lhe rlghLs and obllgaLlons of Lhe parLles Lhe usages of
Lhe Lrade concerned and Lhe clrcumsLances surroundlng Lhe dlspuLe lncludlng any prevlous
buslness pracLlces beLween Lhe parLles
O 1he conclllaLor may conducL Lhe conclllaLlon proceedlngs ln such a manner as he conslders
approprlaLe Laklng lnLo accounL Lhe clrcumsLances of Lhe case Lhe wlshes Lhe parLles may
express lncludlng any requesL by a parLy LhaL Lhe conclllaLor hear oral sLaLemenLs and Lhe
need for a speedy seLLlemenL of Lhe dlspuLe
O 1he conclllaLor may aL any sLage of Lhe conclllaLlon proceedlngs make proposals for a
seLLlemenL of Lhe dlspuLe Such proposals need noL be ln wrlLlng and need noL be
accompanled by a sLaLemenL of Lhe masons Lherefore

Conc|||ators do not

O Make declslons for dlspuLlng parLles
O Make [udgmenLs abouL who ls rlghL who ls wrong or whaL Lhe ouLcome of Lhe dlspuLe
should be
O 1ell people whaL Lo do
O Make rullngs
O lorce parLles Lo parLlclpaLe ln Lhe conclllaLlon process






C3 WhaL are Lhe unfalr Lrade pracLlces under Lhe M81 AcL


1he Monopolles and 8esLrlcLlve 1rade racLlces Commlsslon has been consLlLuLed under SecLlon3 (1)
of Lhe M81 AcL 1969 1he Commlsslon ls empowered Lo enqulre lnLo MonopollsLlc or 8esLrlcLlve
1rade racLlces upon a reference from Lhe CenLral CovernmenL or upon lLs own knowledge or
lnformaLlon 1he M81 AcL also provldes for appolnLmenL of a ulrecLor Ceneral of lnvesLlgaLlon and
8eglsLraLlon for maklng lnvesLlgaLlons for Lhe purpose of enqulrles by Lhem 81 Commlsslon and for
malnLenance of reglsLer of agreemenLs relaLlng Lo resLrlcLlve Lrade pracLlces

1he M81 Commlsslon recelves complalnLs boLh from reglsLered consumer and Lrade assoclaLlons
and also from lndlvlduals ComplalnLs regardlng 8esLrlcLlve 1rade racLlces or unfalr 1rade racLlces
from an assoclaLlon are requlred Lo be referred Lo Lhe ulrecLor Ceneral of lnvesLlgaLlon and
8eglsLraLlon for conducLlng prellmlnary lnvesLlgaLlon 1he Commlsslon can also order a prellmlnary
lnvesLlgaLlon by Lhe ulrecLor Ceneral of lnvesLlgaLlon and 8eglsLraLlon when a reference on a
resLrlcLlve Lrade pracLlce ls recelved from Lhe CenLral/SLaLe CovernmenL or when Commlsslons own
knowledge warranLs a prellmlnary lnvesLlgaLlon Lnqulrles are lnsLlLuLed by Lhe Commlsslon afLer Lhe
ulrecLor Ceneral of lnvesLlgaLlon and 8eglsLraLlon compleLes prellmlnary lnvesLlgaLlon and submlLs
an appllcaLlon Lo Lhe Commlsslon for an enqulry

Unfa|r @rade 9ract|ces

An unfalr Lrade pracLlce means a Lrade pracLlce whlch for Lhe purpose of promoLlng any sale use or
supply of any goods or servlces adopLs unfalr meLhod or unfalr or decepLlve pracLlce

1) Ia|se epresentat|on

1he pracLlce of maklng any oral or wrlLLen sLaLemenL or represenLaLlon whlch

O lalsely suggesLs LhaL Lhe goods are of a parLlcular sLandard quallLy quanLlLy grade
composlLlon sLyle or model
O lalsely suggesLs LhaL Lhe servlces are of a parLlcular sLandard quanLlLy or grade
O lalsely suggesLs any rebullL secondhand renovaLed recondlLloned or old goods anew
goods
O 8epresenLs LhaL Lhe goods or servlces have sponsorshlp approval performance
characLerlsLlcs accessorles uses or beneflLs whlch Lhey do noL have
O 8epresenLs LhaL Lhe seller or Lhe suppller has a sponsorshlp or approval or afflllaLlon whlch
he does noL have
O Makes a false or mlsleadlng represenLaLlon concernlng Lhe need for or Lhe usefulness of
any goods or servlces
O Clves any warranLy or guaranLee of Lhe performance efflcacy or lengLh of llfe of Lhe goods
LhaL ls noL based on an adequaLe or proper LesL
O Makes Lo Lhe publlc a represenLaLlon ln Lhe form LhaL purporLs Lo be
WarranLy or guaranLee of Lhe goods or servlces
A promlse Lo replace malnLaln or repalr Lhe goods unLll lL has achleved a speclfled
resulL
O lf such represenLaLlon ls maLerlally mlsleadlng or Lhere ls no reasonable prospecL LhaL such
warranLy guaranLee or promlse wlll be fulfllled
O MaLerlally mlsleads abouL Lhe prlces aL whlch such goods or servlces are avallable ln Lhe
markeL or
O Clves false or mlsleadlng facLs dlsparaglng Lhe goods servlces or Lrade of anoLher person
2) Ia|se ffer of 8arga|n 9r|ce


Where an adverLlsemenL ls publlshed ln a newspaper or oLherwlse whereby goods or servlces are
offered aL a bargaln prlce when ln facL Lhere ls no lnLenLlon LhaL Lhe same maybe offered aL LhaL
prlce for a reasonable perlod or reasonable quanLlLy lL shall amounL Lo an unfalr Lrade pracLlce

1he bargaln prlce for Lhls purpose means

O Lhe prlce sLaLed ln Lhe adverLlsemenL ln such manner as suggesLs LhaL lL ls lesser Lhan Lhe
ordlnary prlce or
O 1he prlce whlch any person comlng across Lhe adverLlsemenL would belleve Lo be beLLer
Lhan Lhe prlce aL whlch such goods are ordlnarlly sold


) Iree G|fts ffer And 9r|ze Scheme


1he unfalr Lrade pracLlces under Lhls caLegory are

O Cfferlng any glfLs prlzes or oLher lLems along wlLh Lhe goods when Lhe real lnLenLlon ls
dlfferenL or
O CreaLlng lmpresslon LhaL someLhlng ls belng offered free along wlLh Lhe goods when ln facL
Lhe prlce ls wholly or parLly covered by Lhe prlce of Lhe arLlcle sold or
O Cfferlng some prlzes Lo Lhe buyers by Lhe conducL of any conLesL loLLery or game of chance
or sklll wlLh real lnLenLlon Lo promoLe sales or buslness

4) NonComp||ance f 9rescr|bed Standards

Any sale or supply of goods for use by consumers knowlng or havlng reason Lo belleve LhaL Lhe
goods do noL comply wlLh Lhe sLandards prescrlbed by some compeLenL auLhorlLy ln relaLlon Lo
Lhelr performance composlLlon conLenLs deslgn consLrucLlon flnlshlng or packlng as are
necessary Lo prevenL or reduce Lhe rlsk of ln[ury Lo Lhe person uslng such goods shall amounL Lo an
unfalr Lrade pracLlce


S) oard|ng Destruct|on Ltc

Any pracLlce LhaL permlLs Lhe hoardlng or desLrucLlon of goods or refusal Lo sell Lhe goods or
provlde any servlces wlLh an lnLenLlon Lo ralse Lhe cosL of Lhose or oLher slmllar goods or servlces
shall be an unfalr Lrade pracLlce

6) Inqu|ry |nto Unfa|r @rade 9ract|ces

1he Commlsslon may lnqulre lnLo any unfalr Lrade pracLlce

O upon recelvlng a complalnL from any Lrade assoclaLlon consumer or a reglsLered consumer
assoclaLlon or
O upon reference made Lo lL by Lhe CenLral CovernmenL or SLaLe CovernmenL
O upon an appllcaLlon Lo lL by Lhe ulrecLor Ceneral or
O upon lLs own knowledge or lnformaLlon
e||ef Ava||ab|e

AfLer maklng an lnqulry lnLo Lhe unfalr Lrade pracLlces lf Lhe Commlsslon ls of Lhe oplnlon LhaL Lhe
pracLlce ls pre[udlclal Lo Lhe publlc lnLeresL or Lo Lhe lnLeresL of any consumer lL may dlrecL LhaL

O 1he pracLlce shall be dlsconLlnued or shall noL be repeaLed
O 1he agreemenL relaLlng LhereLo shall be vold ln respecL of such unfalr Lrade pracLlce or shall
sLand modlfled
O Any lnformaLlon sLaLemenL or adverLlsemenL relaLlng Lo such unfalr Lrade pracLlce shall be
dlsclosed lssued or publlshed as may be speclfled
O 1he Commlsslon may permlL Lhe parLy Lo carry on any Lrade pracLlce Lo Lake sLeps Lo ensure
LhaL lL ls no longer pre[udlclal Lo Lhe publlc lnLeresL or Lo Lhe lnLeresL of Lhe consumer

Powever no order shall be made ln respecL a Lrade pracLlce whlch ls expressly auLhorlzed by any law
ln force 1he Commlsslon ls empowered Lo dlrecL publlcaLlon of correcLlve adverLlsemenL and
dlsclosure of addlLlonal lnformaLlon whlle passlng orders relaLlng Lo unfalr Lrade pracLlces





C4 WhaL are essenLlals of a valld offer

A proposal ls an expresslon of wlll or lnLenLlon Lo do or noL Lo do someLhlng lL ls also called an
offer lL ls one of Lhe essenLlal elemenLs of an agreemenL lL ls Lhe very basls of Lhe conLracL lL
becomes a promlse when lL accepLed SecLlon 2 (a) of Lhe ConLracL AcL deflnes Lhe proposal as
when one person slgnlfles Lo anoLher hls wllllngness Lo do or Lo absLaln from dolng anyLhlng wlLh a
vlew Lo obLalnlng Lhe assenL of LhaL oLher Lo such acL or absLlnence he ls sald Lo make a proposal
1he person maklng Lhe proposal ls called Lhe proposer or offer or Lhe promlsor 1he person Lo whom
Lhe proposal ls made ls called Lhe offeree or promlseelor example Sunll offers Lo sell hls car Lo
adma[a for 8s 30000 1hls ls a proposal Sunll ls Lhe offer or and adma[a ls Lhe offeree An offer
may be express or lmplled An offer whlch ls expressed by words wrlLLen or spoken ls called an
express offer

An offer whlch ls expressed by conducL ls called an lmplled offer An offer may be poslLlve or
negaLlve lL may be ln Lhe form of a sLaLemenL or a quesLlon for example Srldhar says Lo 8adhlka
LhaL he wlll sell hls scooLer Lo her for 8s20000 1hls ls an express offer

1he karnaLaka SLaLe 8oad 1ransporL CorporaLlon runs omnlbuses on varlous rouLes Lo carry
passengers aL Lhe scheduled fares 1hls ls an lmplled offer by kS81C

1he offer musL be made ln order Lo creaLe legal relaLlons oLherwlse Lhere wlll be an agreemenL lf an
offer does noL glve rlse Lo legal obllgaLlons beLween Lhe parLles lL ls noL a valld offer ln Lhe eye of
law ln buslness LransacLlons Lhere ls a presumpLlon LhaL Lhe parLles propose Lo make legal
relaLlonshlps lor example a person lnvlLe Lo anoLher person Lo dlner lf Lhe oLher person accepLs Lhe
lnvlLaLlon Lhen lL ls noL any legal agreemenL beLween Lhe parLles lL ls soclal agreemenL


An offer musL be deflnlLe and clear lf Lhe Lerms of an offer are noL deflnlLe and clear lL cannoL be
called a valld offer lf such offer ls accepLed lL cannoL creaLe a blndlng conLracL An agreemenL Lo
agree ln fuLure ls noL a conLracL because Lhe Lerms of an agreemenL are noL clear A person has Lwo
moLorblkes Pe offers Lo anoLher person Lo sell hls one blke for a cerLaln prlce Lhen lL ls noL a legal
and valld offer because Lhere ls an amblgulLy ln Lhe offer LhaL whlch moLorcycle Lhe person wanLs Lo
sell 1here ls a dlfference beLween Lhe offer and lnvlLaLlon of offer SomeLlme people offer Lhe
lnvlLaLlon for Lhe sale

Lssent|a|s of a va||d offer

a) A valld offer musL lnLend Lo creaLe legal relaLlons lL musL noL be a casual sLaLemenL lf Lhe
offer ls noL lnLended Lo creaLe legal relaLlonshlp lL ls noL an offer ln Lhe eyes of law eg Sunll
lnvlLes Srldhar Lo a dlnner parLy and Srldhar accepLs Lhe lnvlLaLlon Srldhar does noL Lurn up
aL Lhe dlnner parLy Sunll cannoL sue Srldhar for breach of conLracL as Lhere was no lnLenLlon
Lo creaLe legal obllgaLlon Pence an offer Lo perform soclal rellglous or moral acLs wlLhouL
any lnLenLlon of creaLlng legal relaLlons wlll noL be a valld offer

b) 1he Lerms of an offer musL be deflnlLe unamblguous and cerLaln 1hey musL noL be loose
and vague A promlse Lo pay an exLra 8s 300 lf a parLlcular house proves lucky ls Loo vague
Lo be enforceable Lg Srldhar says Lo Sunll l wlll glve you some money lf you marry my
daughLer 1hls ls noL an offer whlch can be accepLed because Lhe amounL of money Lo be
pald ls noL cerLaln

c) An offer may be made Lo a deflnlLe person or Lo Lhe general publlc When offer ls made Lo a
deflnlLe person or Lo a speclal class of persons lL ls called speclflc offer When an offer ls
made Lo Lhe world aL large or publlc ln general lL ls called general offer A speclflc offer
can be accepLed only by LhaL person Lo whom lL has been made and a general offer can be
accepLed by any person Lg Sunll promlses Lo glve 8s100 Lo Srldhar lf he brlngs back hls
mlsslng dog 1hls ls a speclflc offer and can only be accepLed by Srldhar Sunll lssues a publlc
adverLlsemenL Lo Lhe effecL LhaL he would glve 8s100 Lo anyone who brlngs back hls mlsslng
dog 1hls ls a general offer Any member of Lhe publlc can accepL Lhls offer by searchlng for
and brlnglng back Sunlls mlsslng dog

d) An offer Lo do or noL Lo do musL be made wlLh a vlew Lo obLalnlng Lhe assenL of Lhe oLher
parLy Mere enqulry ls noL an offer

e) An offer should may conLaln any Lerm or condlLlon 1he offer or may prescrlbe any mode of
accepLance 8uL he cannoL prescrlbe Lhe form or Llme of refusal so as Lo flx a conLracL on Lhe
accepLor Pe cannoL say LhaL lf Lhe accepLor does noL communlcaLe hls accepLance wlLhln a
speclfled Llme he ls deemed Lo have accepLed Lhe offer

f) 1he offer or ls free Lo lay down any Lerms any Lerms and condlLlons ln hls offer lf Lhe oLher
parLy accepLs lL Lhen he has Lo ablde by all Lhe Lerms and condlLlons of Lhe offer lL ls
lmmaLerlal wheLher Lhe Lerms and condlLlons were harsh or rldlculous 1he speclal Lerms or
condlLlons ln an offer musL be broughL Lo Lhe noLlce of Lhe offeree aL Lhe Llme of maklng a
proposal

g) An offer ls effecLlve only when lL ls communlcaLed Lo Lhe offeree CommunlcaLlon ls
necessary wheLher Lhe offer ls general or speclflc 1he offer or may communlcaLe Lhe offer
by chooslng any avallable means such as a word of mouLh mall Lelegram messenger a
wrlLLen documenL or even slgns and gesLures CommunlcaLlon may also be lmplled by hls
conducL A person can accepL Lhe offer only when he knows abouL lL lf he does noL know he
cannoL accepL lL An accepLance of an offer ln lgnorance of Lhe offer ls no accepLance aL all

lL should be noLed LhaL an lnvlLaLlon Lo offer ls noL an offer 1he followlng are only lnvlLaLlons Lo
offer buL noL acLual offers

O lnvlLaLlons made by a Lrade for Lhe sale of goods
O A prlce llsL of goods for sale
O CuoLaLlons of lowesL prlces
O An adverLlsemenL Lo sell goods by aucLlon
O An adverLlsemenL lnvlLlng Lenders
O ulsplay of goods wlLh prlceLags aLLached
O 8allway LlmeLable
O rospecLus lssued by a company
O Loud speaker announcemenLs






C3 llnd ouL a case where a person appealed under Lhe Consumer proLecLlon AcL and won






C6 WhaL does Lhe lnformaLlon 1echnology AcL enable

ln May 2000 aL Lhe helghL of Lhe doLcom boom lndla enacLed Lhe l1 AcL and became parL of a
selecL group of counLrles Lo have puL ln place cyber laws ln all Lhese years desplLe Lhe growlng
crlme raLe ln Lhe cyber world only less Lhan 23 cases have been reglsLered under Lhe l1 AcL 2000
and no flnal verdlcL has been passed ln any of Lhese cases as Lhey are now pendlng wlLh varlous
courLs ln Lhe counLry
AlLhough Lhe law came lnLo operaLlon on CcLober 17 2000 lL sLlll has an elemenL of mysLery around
lL noL only from Lhe percepLlon of Lhe common man buL also from Lhe percepLlon of lawyers law
enforclng agencles and even Lhe [udlclary
1he prlme reason for Lhls ls Lhe facL LhaL Lhe l1 AcL ls a seL of Lechnlcal laws AnoLher ma[or hurdle ls
Lhe relucLance on Lhe parL of companles Lo reporL Lhe lnsLances of cybercrlmes as Lhey donL wanL
Lo geL negaLlve publlclLy or worse geL enLangled ln legal proceedlngs A ma[or hurdle ln cracklng
down on Lhe perpeLraLors of cybercrlmes such as hacklng ls Lhe facL LhaL mosL of Lhem are noL ln
lndla 1he l1 AcL does glve exLraLerrlLorlal [urlsdlcLlon Lo law enforcemenL agencles buL such
powers are largely lnefflclenL 1hls ls because lndla does noL have reclproclLy and exLradlLlon LreaLles
wlLh a large number of counLrles
1he lndlan l1 AcL also needs Lo evolve wlLh Lhe rapldly changlng Lechnology envlronmenL LhaL breeds
new forms of crlmes and crlmlnals We are now beglnnlng Lo see new caLegorles and varleLles of
cybercrlmes whlch have noL been addressed ln Lhe l1 AcL 1hls lncludes cyber sLalklng cyber
nulsance cyber harassmenL cyber defamaLlon and Lhe llke 1hough SecLlon 67of Lhe lnformaLlon
1echnology AcL 2000 provldes for punlshmenL Lo whoever LransmlLs or publlshes or causes Lo be
publlshed or LransmlLLed any maLerlal whlch ls obscene ln elecLronlc form wlLh lmprlsonmenL for a
Lerm whlch may exLend Lo Lwo years and wlLh flne whlch may exLend Lo LwenLy flve Lhousand
rupees on flrsL convecLlon and ln Lhe evenL of second may exLend Lo flve years and also wlLh flne
whlch may exLend Lo flfLy Lhousand rupees lL does noL expressly Lalk of cyber defamaLlon 1he
above provlslon chlefly alm aL curblng Lhe lncreaslng number of chlld pornography cases and does
noL encompass oLher crlmes whlch could have been expressly broughL wlLhln lLs amblL such as cyber
defamaLlon