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Legal Aspect of Business
Legal Aspect of Business
6. Content of law :- The law is a living thing and changes throughout the course of history. Law responds to public opinion and changes accordingly. Law can never be static. Therefore, amendments are made in different laws from time to time. For example, the Monopolistic and Restrictive Trade Practices Act, 1969, has been subjected to many amendments since its inception in 1969. 7. Two basic ideas involved in law :- The two basic ideas involved in any law are: (i) to maintain some form of social order in a group and (ii) to compel members of the group to be within that order. These basic ideas underlie formulation of any rules for the members of a group. A group is created because first, there is a social instinct in the people to live together and secondly, it helps them in self-preservation. Rules are made by the members of the group, so that the group doesnt whither away. 8. Law is made to serve some purpose which may be social, economic or political :Some examples of law in the widest sense of the term. Law in its widest sense may include: a. Moral rules or etiquettes, the non-observance of which may lead to public ridicule, b. Law of the Land the non-observance of which may lead to arrest, imprisonment, fines, etc., c. Rules of international law, the non-observance of which may lead to social boycott, trade-sanctions, cold war, hot war, proxy war, etc.
Q2. What is Partnership? Briefly state special features of a partnership on the basis of whi existence can be determined under the Indian Partnership Act?
Ans:-- Partnership is defined as the relationship between persons who have agreed to share profits of a business carried on by all, or by any of them acting for all. On analysis of the definition, certain essential elements of partnership emerge. These elements must be present so as to form a partnership and are discussed below. 1. Partnership is an association of two or more than two persons:- There must be at least two persons who should join together to constitute a partnership, because one person cannot become a partner with himself. These persons must be natural persons having legal capacity to contract. Thus, a company (which is an artificial person) cannot be a partner. Similarly, a partnership firm cannot be a partner of another partnership firm. As regards maximum number of partners in a partnership firm, Sec.11 of the Companies Act, 1956, puts the limit at 10 in case of banking business and 20 in case of any other business. 2. Partnership must be the result of an agreement between two or more persons:- An agreement presupposes a minimum number of two persons. As mentioned above, a partnership to arise, at least two persons must make an agreement. Partnership is the result of an agreement between two or more persons (who are known as partners after the partnership comes into existence) . 3. The agreement must be to carry on some business:- The term business includes every trade, occupation or profession *Sec.2(b)+. Though the word business generally conveys the idea of numerous transactions, a person may become a partner with another even in a particular adventure or undertaking (Sec.8). Unless the person joins for the purpose of carrying on a business, it will not amount to partnership.
4. The agreement must be to share profits of the business:- The joint carrying on of a business alone is not enough; there must be an agreement to share profits arising from the business. Unless otherwise so agreed, sharing of profits also involves sharing of losses. But whereas the sharing of profits is an essential element of partnership, sharing of losses is not. Example: A, a trader, owed money to several creditors. He agreed to pay his creditors out of the profits of his business (run under the creditors supervision) what he owed to them. Held, the arrangement did not make creditors partners with A in business [Cox v. Hickman, (1860) 8 H.L.C., 268]. Formation of partnerships All the essential elements of a valid contract must be present in a partnership as it is based on an agreement. Therefore, while constituting a partnership. The following points must be kept in mind: 1. The Act provides that a minor may be admitted to be benefits of partnership. 2. No consideration is required to create partnership. A partnership is an extension of agency for which no consideration is necessary. 3. The partnership agreement may be express (i.e., oral or writing) or implied and the latter may be inferred from the conduct or the course of dealings of the parties or from the circumstances of the case. However, it is always advisable to have the partnership agreement in writing. 4. An alien friend can enter into partnership, an alien enemy cannot. 5. A person of unsound mind is not competent to enter into a partnership. 6. A company, incorporated under the Companies Act, 1956 can enter into a contract of partnership. Duration of partnership The duration of partnership may or may not be fixed. It may be constituted even for a particular adventure. Partnership at will In accordance with Sec.7, a partnership is called a partnership at will where; (i) it is not constituted for a fixed period of time and (ii) there is no provision made as to the determination of partnership in any other way. Therefore such a partnership has no fixed or definite date of termination. Accordingly death or retirement of a partner does not affect the continuance of such a partnership. Particular partnership In accordance with Sec.8 a particular partnership is one which is formed for a particular adventure or a particular undertaking. Such a partnership is usually dissolved on the completion of the adventure or undertaking. Limited partnership In this type of partnership, the liability of certain partners is limited to the amount of capital which they have agreed to contribute to the business. In a limited partnership, there will be at least one general partner whose liability is unlimited and one or more special partners whose liability is limited.
Q3. Examine the rights of a consumer enshrined under the Consumer Protection Act, 1986.
Ans:-- Rights of Consumers For the first time in the history of consumer legislation in India, the Consumer Protection Act, 1986 extended a statutory recognition to the rights of consumers. Sec.6 of the Act recognizes the following six rights of consumers: 1. Right to safety, i.e., the right to be protected against the marketing of goods and services which are hazardous to life and property. 2. Right to be informed, i.e., the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumer against unfair trade practices. 3. Right to choose: It means right to be assured, wherever possible, access to a variety of goods and services at competitive prices. In case of monopolies, say, railways, telephones, etc., it means right to be assured of satisfactory quality and service at a fair price. 4. Right to be heard, i.e., the consumers interests will receive due consideration at appropriate forums. It also includes right to be represented in various forums formed to consider the consumers welfare. 5. Right to seek redressal: It means the right to seek redressal against unfair practices or restrictive trade practices or unscrupulous exploitation of consumers. It also includes right to fair settlement of the genuine grievances of the consumers. 6. Right to consumer education: It means the right to acquire the knowledge and skill to be an informed consumer.
Q4. What do you mean by bailment? What are the requisites of a contract of bailment? Explain.
Ans: Bailment:A bailment is a delivery of goods one person to another for some purpose upon a contract that they shall be returned or otherwise disposed of according to the directions of the person delivering. The person delivering the goods is called the "Bailor". The person to whom they are delivered is called "Bailee". Following are the important essential of bailment: 1. Contract:It is the basic essential for the bailment. For the delivery of goods contract between the two parties is necessary. Contract may be oral or written, implied or expressed. 2. Moveable Property:It is the main feature of bailment that it is only for the moveable property and not for the immoveable property. 3. Delivery of Goods:It is also necessary that goods should be delivered by one person to another. 4. Change of Possession:Bailment contract also brings change in the possessions of the goods. Only b without possession is not sufficient for this contract. 5. Purpose of Bailment:The object of bailment may be for the safety of goods or for hire or for the use. 6. Temporary Delivery:-
The delivery of the goods may not be for the permanent purpose. it is essential that delivery must be made for the temporary purpose. 7. Ownership:right of ownership remains with bailor and it does not change by the delivery of goods to other person. 8. Change In Shape:If bailed goods shape changes in the meantime even then it remains a contract of bailment. 9. Parties of the Contract:In the contract of bailment there are two parties, the bailor and the bailee. 10. Returnable:It is very important feature of the bailment. The bailee should return the goods to the bailor or disposed according the directions of the bailor.
Q5. Name the instruments which are recognized as negotiable instruments by the Negotiable Instruments Act, 1881.
Ans: