REVISION Workbook CA FOUNDATION Theorymasters Learning 6

THEORYMASTERS LEARNING CA FOUNDATION (BUSINESS LAWS)
Chapter 1- The Indian Contract Act, 1872

Unit 1a: Nature of Contract
INTRODUCTION
It received the assent on 25th April, 1872 and was introduced on 1st September, 1872. -
It applies to the whole of India.

=
① ②
AGREEMENT [S 2(e)]:[
consideration ]
,]+Enforceabihh÷
[AGREEMENT = OFFER + ACCEPTANCE
-00
CONTRACT [S 2(h)] = An agreement enforceable by law is a contract
CONTRACT= AGREEMENT + ENFORCEABLE BY LAW

Coffer + Acc + Enf )=
Balfour#
Presumption? No Presumption? alfowr
¢ Commercial trans
"
Business social / Domestic
goods services agm

family members
,
friends ,
,
[
All Contracts are agreements, but all agreements are not contracts usband ,
↓ Def ✗
"
wife )
Defn
-
•
( =
agr7Enf .
EnfA .
Agrm =
•+ -
•
Business -
Comm ✓ Social Dom ✗
egs
• .
For books and video lectures visit: www.theorymasterslearning.com

ESSENTIAL ELEMENTS OF A VALID CONTRACT [S 10]

1. Two Parties
distinct -
parties
capable of
2. Proper offer and acceptance
contracting )
contract
Agrmt Enf
.
A
Enf
'
3. Intention to create legal relationship =

Enf
.
B/c social / Domestic ✗ .

Balfour V
Balfour .
4. Free consent (Coercion, Undue Influence, Fraud, Misrepresentation, Mistake)

-74
threw intention erroneous
to cheat 4-
force
Physical mental alserep
belief
.
deceive
pressure → innocency .
tub parties
5. Capacity of parties (Section 11)
→
major
→ Sound mind
→ ✗ disqualified .
6. Lawful Consideration (Section 23)

d
something
in return
quid pro quo
.
7. Lawful Object (Section 23)

↓
purpose
not enforceable
-
8. Agreement must not expressly be declared void
→ bylaw
voidab Void contract marry
Valid ( when entered) A-
Beg
initio
.
Minor ✗ Y Traunstein us died )
Tail
9. Certainty of Meaning (Section 29)
☆ Hater) Tad
↓
Y
✗
( NOT valid kind oil ? )
£100/ llr
,
of
(dealer .
in oil )
diff
10. Possibility of Performance (Section 56)

legally
physically
] Possible of Performance
11. Legal formalities
writing attestation
, ,
stamping ere .
CLASSIFICATION OF CONTRACT
1. Void Contract [Section 2(j)]
void ab
- -
void
2. Voidable Contract [Section 2(i)] valid

=
☐ on _ ×wera• Aggrieved OR
coercion
mistake→
,
undue
void
?⑧=aEd misrep
Ifl ,
party
=voidable
rescind the contract
Restore the
benefit
3. Illegal Contract [Section 23]
keyword -
forbidden by
law , punishment
4. Valid Contract
Wall essentials
5. Unenforceable contract removed

technical defect
1 defect
unenforceable enforceable
6. Express Contract oral
words /_
written .

THEORYMASTERS LEARNING
By fact CA FOUNDATION (BUSINESS LAWS)
action ,#uct inferred eg Bus -
fixed
7. Implied Contract
← of
circumstances case route .
-
By#wj¥y → used .
left goods
8. Tacit Contract
☆ATM ,
↳ fall
silence sale
by of hammer
~
9. Executed Contract or Unilateral Contract
my ,
BOTH performed # my mama ,agmgmam
⑤ contract
of
.
MY
-
✗
2=10,000
10. Executory Contract or Bilateral Contract
→
BOTH have to still perform
.
goodˢj±
Unit 1b: Offer and Acceptance

OFFER
DEFINITION desire
ʰ
.
According to Section 2(a) of The Mere expression of willingness

Indian Contract Act, does not constitute offer
communicates
-
person signifies to another his

willingness to do or abstain from doing
Examples:
anything with a view to obtaining the
✗ *
______________________________
→
assent of the other, he is said to have

0
A → B
______________________________

Ord
As
RULES OF OFFER Theory
LAPSE OF OFFER
.
1) Offer must be capable of creating legal

-
1. By Revocation
relation tall back
Business / Comm ✓
-
.
Social / Domestic ✗ 2. By Lapse of Offer= time

(Case Law: Balfour v Balfour) A - B
7-
days
.
2) Offer must be communicated 3. By death/insanity of offeror or

offeree⑥
before acceptance
Tard
.
(Case Law: Lalman Shukla v Gauri Dutt)

4. By failure to accept condition
3) Offer must be certain, definite and not vague
- - _
precedent before .
A B
5000
advance .
5. By counter offer
4) Offer may be conditional
④ ⊕ÉdB
✓ counteroffer -
along
communicated
6. By not accepting it in the prescribed
with
offer mode
=
cow①
*- Y
5) Offer should not contain a term the non-
-
compliance of which amounts to acceptance

t¥B 7. By rejection of offer by the offeree
_
A #☒
6) Offeror must communicate special terms or
=
standard form of contracts 8. By subsequent illegality or
IT
# destruction of subject matter of the
(
offer
- EE B
onions
7) Offer must be distinguished from invitation
.
to offer ⑨ Case based As ) Govt Ban - =

Before
acceptance
Int
y
.
to
offer offer
-
-1
Final circulation EY
willingness of offer ✗
• •
definite Not definite

•
destroyed floods .
•
accepted / rejected invites offer from
•
immediately other
person
.
can be converted window

auction >
•
into contract (SCAN FOR VIDEO ON

8) Offer may be display COMMUNICATION OF SPECIAL
prospectus
.
TERMS)
TYPES OF OFFER
www.g-eahnonuge
"
→
1. General Offer can be
by
accepted anyone
.
_____________________________________________________________________
(Case Law: Carlill v Carbolic Smokeball Co.)
2. Special/[
Specific Offer]→ to whom
accepted
made
it is
by .
person
_____________________________________________________________________
3. Cross Offer
Identical offers] -
ignorance] .
_____________________________________________________________________
4. Counter Offer
eiuftim of original offer
offer
modification variation qualification
_____________________________________________________________________
.
, ,
5. Standing, open or continuing offer

-
X,
Example: A Ltd :# ②
P
2 a
years
.
R
______________________________________________________________________
6. Express Offer words
______________________________________________________________________
cirur
7. Implied Offer action conduct
of case
. .
, ,
Examples:
__________________________________________________________________________________
__________________________________________________________________________________

ACCEPTANCE
As per Section 2(b) of The 1. Acceptance must be absolute and unconditional
= =
Indian Contract Act, 1872, [Section 7]
counter
offer
✗
acceptance
proposal is made signifies his
assent thereto, the proposal is 2. Acceptance must be given only by the person to whom
-
the offer is made / auth person .

.
Boulton ✓ Jones
Example:
Powell Lee
s
v .
A B
3. Acceptance must be communicated
✓Yes .
To whom: ___________
offeror offerer
By whom: _______________
______________________________________________
Powell u Lee
4. Silence cannot amount to acceptance
5. Acceptance must be in the mode specified

=
specified
6. Time
( reasonable
=
Not specified time )
7. Acceptance must be given before lapse of offer
=
8. Expressed Acceptance
9. Implied Acceptance
-
case based Cls .
Examples: we board bus .
fall hammer
of

COMMUNICATION OF OFFER AND ACCEPTANCE [Section 3 to 6]

✗ MY
offer
acceptance
noµ✓
51 714
offer → communicated th
acceptance complete
%,y
Revocation offer before sly acceptance
befog , ,
-
-
1. Communication of offer is complete when it comes to the knowledge of offeree.
2. Communication of acceptance is complete
As against Offeror As against Offeree
The offeror / proposer becomes bound by The acceptor is bound by the

the acceptance as soon as a properly acceptance when it comes to the
addressed and stamped letter of acceptance knowledge of the proposer (i.e.
is put in the course of transmission by the received by the proposer)
offeree.
3. Revocation of offer
An offer or proposal may be revoked any time before the communication of its
acceptance is complete as against the proposer.
4. Revocation of Acceptance
An acceptance may be revoked any time before the communication of acceptance is
complete as against the acceptor.
CONTRACTS OVER TELEPHONE/TELEX/FAX/E-MAIL

In case of contracts over telephone, telex, fax or e-mail, contract will be complete
only when the acceptance is received by the proposer and not when it is transmitted by
the acceptor.

DEFINITION
Unit 2: Consideration
ESSENTIAL ELEMENTS OF VALID CONSIDERATION
⑨
1-
Theory
An agreement without consideration 1) Consideration•
MUST move at the desire of the
is void promisor " '
volunta ✗ consd
✓ caused
"
Promis
-
-
or
Section 2(d) of The Indian Contract

Act, 1872, defines consideration as, 2) Consideration MAY move from any other
person
the promisee or any other person
has done or abstained from doing, or
does or abstains from doing or Case Law: Chinnaya v Rammaya ,
promises to do or abstain from doing
something, 3) Consideration must be of some value
/
=
such an act or abstinence or promise is adq inadq

.
When considered?
In simple words, consideration means

Consent =
Not
free .
loss to one party and gain to other 4) Consideration must be real & not illusory
party Real? actual ,
④ ¥0
#ons⑤reo%t
loss Gain
Illusory?
imaginary
LEE
Gain loss 5) Time (Past, Present, Future)
Toooo
the request of
Past: before [ at promises]
Present:
simultaneously
Future: after consd
"
,
executory -
6) Consideration must not be something that the

promisor is already bound to do
Ix
Police
-
-2-5000
7) Consideration must not be illegal, immoral or-

_
opposed to public policy

eg
Illegal: drugs
.
Immoral:
eg prostitution
-
-
Opposed to public policy:

society
donation to
eg college
.
SUIT BY THIRD PARTY

=
t
NO CONSIDERATION NO CONTRACT
RULE: Stranger to contract cannot sue.

④É!? [
☆
s_
EXCEPTIONS:
1) Agreements made on account of natural love
.
] case based Cls

and affection
?
&
.
-
Conditions
ianger to contract
writing
&
{ }
-
But a stranger to consideration can sue

Registered
°
A R
deed / contract
- ◦
Based on Natural love and off
a. ansan set
.
drip
^
strange beth
'
towns , Near
=
stranger • →
persons →
✗ deed ✗ contract
an sue 2) Agreement to compensate for past voluntary
=
services
=
stranger to contract =
cannot sue =
Conditions
1) In case of a trust •
✓ voluntarily
◦ ✓
promiser
Beneficiary can sue .
=
✓
✓
enjoyed the
to
benefit
compensate
•
intention
.
2) In case of family settlement 3)Promise to pay time barred debt

A- Bro .
B- Conditions
=
Beneficiary
Mot④ stranger beyond 3ps
-
_can sue .
A B in writing
-
-
3) In case of certain marriage contracts
TB debt
pay
-
HUF
eg
signed
marriaf,H
.
4) Contract of agency
.
4) Assignment of contract
an_owµbdfemenᵗ
☆
To
transfer 5) Completed gift
Assignee can sue -
✓ valid contract
Completed: _____________________________
-
5) Estoppel by acknowledgement of
✗ valid contract
Promise:________________________________ .
liability/part performance thereof
6) Bailment to deliver
¥4
→
"
µ can sue
✗ consol ✓
A →B.
6) Covenant running with land m
valid
safekeeping
-
Conditions attached to land contract

. .
Meaning: .
Binding on: current 7)Contribution to charity

future owners .
Completed: ✓ valid
✗ Too y
Promise: ✗ Valid inured
7) Contract with Agent
.
Agent
enpZ3o④
- TP .
=
1
Princip alanger sue

.
Scan the QR Code to watch the
can
video on stranger to contract
Unit 3: Other Essential elements of a valid contract

CAPACITY OF PARTIES
5¥
Capacity to contract means persons entering into a contract must be competent / capable
-
to enter into a valid contract.

FOLLOWING PERSONS ARE NOT COMPETENT TO CONTRACT
A) MINOR
Minor is a person who is below the age of eighteen years.
An agreement with a minor is void-ab-initio
ooo .
Minor is incapable of giving a promise imposing a legal obligation

(Case law: In MohiriBibee vs. Dharmodos Ghose) 2=20000
#-
Parents/Guardians can enter into a contract on behalf of minor for his ☐
benefits.
Minor cannot hold parents or guardians liable by his acts.

-_
man
www.ag.mg
Guardian /
faint
Parents/Guardian cannot bind a minor in a contract to purchase immovable properties
Even if minor falsely represents his age, contract is still void-ab-initio as he can always
plead minority.
-
☆Minor cannot ratify the agreement after attaining majority

#
mi=v④z
major =
If any necessaries of life (food, clothing, shelter, education, health, legal advice) are ☆
supplied to a minor, he is not personally liable but only his property is liable. [Section 68]
= = =
Noconsdn
A minor can be appointed as an agent, but principal shall be liable for his acts as an agent
contract void ab initio
.
-
-
Minor cannot become member of a company by allotment of shares. But he may by
→opeE€
transfer or transmission become holder of fully paid shares
the contract. # •
Minor can be held liable for tort if the wrongful action is of a kind not contemplated by
-
-
civil wrongful
wrong
act
✗ ↳ minor
->①
liable
= .
✗ # minor
f- liable .

Interact
B) CONTRACT BY PERSON OF UNSOUND MIND
@ contract
Unsoundness may be either
✓ esfonnana
Permanent Temporary
-
Idiot ← void at initio

- -
Usually sound but occasionally unsound

Usually unsound but occasionally sound
If contract is entered during
sound → Lucid Intervals or Lunatic intervals
mind
Valid Void
C. PERSONS DISQUALIFIED BY LAW
Alien Enemy- Contracts during war:

←
[No] void
dissolved
Contracts before war:< against
public policy →
against public policy suspended

=
Not →
revived
Foreign Sovereigns, Ambassadors, Diplomatic Staff, Accredited representatives of *
-
aftnwas
- -
foreign states
-
immunity
Convicts
In prison- No contract
-
→ b
On completion of sentence / Parole- yes
Assets
Insolvents No contract adjudicated Rec /

official
.
Assignee
.
Company or Statutory Corporations under Special Acts of Parliament
m¥ My beyond
→
own statute
powers
ICAI ,
SBI ,
Llc
,
RIC ultra vires .

?⃝
EI Free consent
are said to have consented when they agree upon the same thing in the same
i.e. consensus-ad-idem
t r
CONSENT IS NOT FREE WHEN IT IS CAUSED BY ✓

✓ ✓
COERCION [S 15] UNDUE INFLUENCE [S 16] FRAUD [S 17]
C
Coercion means Contract is said to be induced by Fraud means false representation
- committing or undue influence of facts made willfully with an
- threatening to commit any a) Where the relations subsisting intention to cheat or deceive the
act forbidden by the Indian between the parties are such that other party.
=
Penal
=
Code one of the parties is in a position Fraud means & includes the
or - unlawful detaining or to dominate the will of the other, following acts committed
- threatening to detain any and a) by party to the contract or
property, to the prejudice of
-
-
b) he uses that position to obtain b)÷with his connivance (support)
any person, with the intention
unfair advantage over the other. or
of causing any person to enter
Moral or Mental Pressure is c) by his agent
into an agreement] -
involved with the intent to deceive the

Coercion involves physical
These acts are not forbidden by other party or his agent or to
force
the Indian Penal Code induce him to enter into a
These acts are forbidden by
the Indian Penal Code Fiduciary relationship is contract
→
The act constituting ¥ required There is intentional false
coercion may proceed from representation of facts, hence
The following relationships are it is forbidden by the Indian
any person, and may be
said to raise the presumption of Penal Code
directed against any person,
even a stranger. undue influence
This means that no a) Solicitor- Client Following acts amount to fraud
I
relationship is required to b) Doctor- Patient i) The suggestion, as to a fact, of

-
exercising coercion c) Spiritual Advisor- Devotee that which is not true, by one
Threat to commit suicide d) Parent- Child who does not believe it to be true
amounts to coercion.
A contract brought about
e) Guardian- Ward
f) Trustee- Beneficiary
Frau
Knowingly? Fraud
ii) Active concealment of fact by
by coercion is voidable at one having knowledge or belief
the option of the party When consent to an agreement is
of the fact caveat
caused by undue influence, the ,Emr%Yd
'
whose consent was so Mere concealment?

obtained. agreement is a contract voidable
iii) A promise made without any
at the option of the party whose intention of performing it
consent was caused.
-
iv) Any other act fitted to deceive

=
v) Any such act/omission as the

law specially declares to be
I
fraudulent

;
-
MISREPRESENTATION [S 18] MISTAKE [S 20,21,22]
Misrepresentation is false Mistake means an erroneous belief concerning something.
representation of facts made Mistake may be of two kinds:
innocently (A) Mistake of Fact
It is an unintentional i) Bilateral Mistake [S20]- means when both parties to the
misrepresentation of facts
agreement are mistaken as to the matter essential to the agreement.
Since there is no intention to
cheat, it is not forbidden by Indian Such agreements are void-ab-initio. ④
= hors
Penal Code
The person making the statement, ii) Unilateral Mistake [S 22]- Unilateral mistake means a mistake
believes it to be true. in which only one of the parties to an agreement is at mistake about
Effects of misrepresentation the fact essential to the agreement. Generally, a unilateral mistake
}
1) Right to rescind the contract - identity
does not render the agreement void. Exceptions -
1-
2) Right to insist upon voidable nature
does
of
Performance (B) Mistake of Law .
⑥
Damages? * ◦ i) Mistake of Indian Law [S 21]- Contract is not voidable, as one
is expected to know law of own country.
=
Fraud Yes
damagesIn other words, the contract remains valid.
.
__ =
ii) Mistake of Foreign Law- Contract is void if0

both parties are
=
under mistake as to foreign law

579,19A → voidable Mistake __ void
↑
undueinfl
UNLAWFUL OBJECT AND UNLAWFUL CONSIDERATION 5%3
- -
Circumstances under which the object or consideration is deemed to be unlawful:

1. Agreement forbiddengal
by law ⑦ →
✗
2. Agreement defeating the provisions of law
after 3ps
.
#
3. Agreement which has fraudulent object
4. Agreement causing injury to a person or loss of property.
=
5. Where consideration is immoral.

-
☆6. Where consideration is opposed to @public policy. Qlca )

a) Trading with an enemy
E¥z
stop
Prosecution file a case
.
b) Stifling
c) Marriage brokerage contracts
egdowoy
.
d) Agreement interfering with course of law and justice

☆ bribe .
2-
e) Interest against obligation bribe .
selling ingovt
f) Trafficking jobs
public offices
.
✓¥
g) Agreement for the creation of monopolies
h) Champerty and Maintenance
A
M r
u r
→
*
✗
10T .
sharing
sharing of proceeds .
AGREEMENTS EXPRESSLY DECLARED AS VOID

Eat
legal illegal
Consideration
.
is unlawful
-÷ Agreement in restraint
Partial
Agreement in restraint
tompkte .
in parts [Section 24] of marriage [Section 26]

#
of trade [Section 27] ☆
(1) If illegal part cannot be Every agreement in restraint ofrestraint
Exceptions:
restraint'7oid
partial
=
separated from legal part
#
marriage is void 2
(1) When goodwill of the business is
→ sold, the seller may be restrained from
agrm=i. illegal
✗
entire
carrying on a similar business within
void → # complete specified local limits.
(2) If illegal part can be Exceptions:
#eÉY
restraint
separated from legal part Restricting marriage of a minor is
valid ✓
valid
legal part
-
(2) An agreement through which an

-
egrui outgoing partner will not carry on the

business of the firm for a 0
reasonable
illegal part void
time will be valid, though it is in
-
restraint of trade
2T£ .
ABC
-
≤ retire
.
(3) An agreement of service through

=
which an employee commits not to
compete with his employer is not in
restraint of trade
Mgt
✗ MY trainee
__________________________
service bond
__________________________
✗ - Y leave .
__________________________
6m
cooling
-
pen .
✗ other
__________________________
✗
(BR) hospital
Govthospital
AGREEMENT THE MEANING OF WHICH IS UNCERTAIN IS VOID [Section 29]
Examples:

AGREEMENTS IN RESTRAINT Betting

WAGERING AGREEMENT
OF LEGAL PROCEEDINGS [SECTION 30] ☆
[SECTION 28]
☆
An agreement by which any party 1. Meaning:
is restricted absolutely from ascertainment of future uncertain event is known as
enforcing his legal rights under or wagering.
in respect of any contract is void
① y
9ndialose.vn
13 gndiawin
Exceptions:
a) A contract by which the parties 2. Wagering agreements are void but collateral to wagering
agree that any dispute between are valid.
them shall be referred to
arbitration and will not be taken
to the court is a valid contract.
¥_
3. Wagering agreements are ________ in Maharashtra and
Gujarat
Arbitration? out court
of
settlement
void
Hence, collateral are_______________ .
Example?
④-ᵈʰpnʰ⑤
↓
valid
4. Agreements involving skill are __________________
=
Art void
Agreements involving chance are ________________-
↳
(b) Contracts specifying the
courts exam as
=
.
_ wager __void
-_
Delhi
-
✗ →
wager
mum If the amount is more than or equal to Not __
*mbai
court
Yes
6. Is Lottery wager? ___________
.
Agreement is _________
only .
valid
State Govt -
_ allows .
sell
.
Buy /
7. Speculative transactions are ___________ as they involve
1-
___________
Risk
only
Risk +
↓
delivery
Gambling
↳ void .
Valid .

Unit 4: [
Performance] of a Contract
✗
¥-1
[Section 51 54]
WHO CAN PERFORM? JOINT PROMISE
☆
@ 2.43.44] RECIPROCAL PROMISE
- - -
Meaning: Promises which

1. Promisor
✓ himself 1. Joint and several liability of joint form the consideration for
↑
- -
promisor [S 43] 38000 each other are called

2. Agent ⑧+④ ② +
reciprocal promises
except Skillet > wnsd ☆ entire amt } taneom
"
"
1) Mutual and concurrent

3. Legal Representativedeaths 2. Right to claim contribution [S 43]
✓
However, if the contract Yes Y 2
2) Mutual and✓ ¥Ef
dependent .
involves personal skills and

I toooo
.
toooo
3) Mutual and Independent
↳
pendety
=
if the promisor dies, the 3. Sharing of loss by default in equally C
.
IMP: Where one party to a
contract becomes void. reciprocal promise prevents
! contribution× Y 2
,
[S 43] toooo toooo toooo the other party from
+2500
4. Third person, if promisee + 2500
50%5000 performing his promise, the
I -1
permits ✗
E-
'④ default sooo contract becomes voidable at ☆
r 4. Effect of release of one joint promisor the option of the party who is
5. Joint promisor [S 44] *
15000
*
15000 later
2⑧so prevented. And the ⊕
aggrieved party can also
↳
Not recover
recover compensation.]
released 2
from
Theory
TIME IS ESSENCE [Section 55]
commercial
⑥ non commercial
Legal and Illegal Reciprocal
# Promises
µ
-
.
Where time is essence of contract Where time is not an essence of contract Legal Part Illegal Part
Failure to perform on time
Voidable .
Failure to perform on time
✗ voidable .
⇐
Valid Void 2
Promisee (Aggrieved party can) Promisee (Aggrieved party can) But if the things are
cancel ( rescind) inseparable then the entire
_________________________
only
_______________________________
claim
#
agreement is void
damages
.
_________________________ damages
_______________________________
Goods = time = essence
A
#
}
price time = ✗ essence
B
=
APPROPRIATION OF PAYMENT [Section 59 to 61]

300g
Meaning: In case there are several debts owing by one person to another, and certain payment is made which
5000
is insufficient to discharge all the debts, then the order in which debts are to be satisfied is called
.
Debtor expressly intimates Circumstances imply Debtor does not intimate Neither party appropriates
2=40000
Rudel
=
④f=④ooo RUCK
z✗
RUKH
ti④
E④0ʰ
2£
2-5000
apply asper arvvanydut Same day Debt?

32 proportionate
directions of 4000×20007000
dr Even time barred debt can be adjusted
4000 ✗ 30C
sooo
Discharge of Contract
M O B I contract L E
substitution @
Novation Death of Promisor Actual Initial Law of Performance
Eontract.IR Breach? Ñdab Limitation? Actual:
G original
=
Rescission
contract
skill ?
Insolvency dischg
declared
-
✗
initio
☒-qftn✓y Attempted:
original
.
Supervening
contract
✗
"" Ms @A
Anticipatory
foomativmalidlwhen
E-
Alteration Unauthorized Breach?
Material entered)
Fabian Alteration ofcon circumstances
parties -
_
same .
* #y void later
Remission that
*
fulfilmentSame identity
storeyed 2. A-B.
many
.
of
promisor and died)
Waiver promisee
Y BIP %
☒ up ¥ X - .
BIR
→smg@
✗
= %) Breach of Contract
ACTUAL BREACH ANTICIPATORY BREACH
Ontheduedt
OR
before the duedt
aggrieved party
during
the course
of 1-
Performance cancel wait till
immediately
dnedt
'
Remedy tothe
claim '
'
/\
aggrieved party damages '
/
accept rescind
Rescind contract the
'
perf on
dhldt
← (t )
(t )
claim
damages contract -_
supervening
£
claim
impossibility damage
For books and video lectures visit: www.theorymasterslearning.com damages
Unit 5: Breach of Contract -0s

Theory
.
DAMAGES FOR BREACH OF CONTRACT OTHER REMEDIES FOR BREACH OF CONTRACT
1) Ordinary/ Usual damages: Apart from claiming damages, following remedies are
p 120-100=201available in case of breach of contract:-
Breach by Seller: _____________
cp MP
Breach by Buyer: _____________
-
100-90=10 kg 1. Rescission of contract

=
/
/ kg
.
→ 2=120
kg
- - -
£90
.
-2-100 /
kg 2. Suit for Specific Performance: → case based Cls
2) Liquidated damages:
.
Where
Pre estimated
___________damages
-
which shall arise in

(i) The damages are not an adequate remedy or
°__
ordinary breach circumstances.
(ii) The damages cannot be estimated or
¥per
3) Special damages:
unit -2-50,000
(iii) The subject matter of contract is unique in nature,
Then the aggrieved party can file a suit for specific
boss
of
Claimed for __________________________ profit performance in the court.
Only when However, it is at the discretion of the court.
____________________________________
special circumstances
communicated to other
party
4) Exemplary/ Vindictive/ Punitive damages:
-
=
- - 3. Suit for [
Quantum Meruit] (Scan for detailed video
Here intention of the party is not to recover
on quantum meruit)
loss but to punish the other party. It can be =
claimed in -following cases:

Breach promise
a) _________________________________
ofdishonour
b) _________________________________
tomarry
wrongful chg of 4. Suit for [
Injunction
]
by banker Injunction is an order of the courts restraining a person
5) Nominal damages: from doing something which he promised not to do.
Here intention of the parties to establish a
right to sue. Such damages are awarded by
=
court. Such damages are for nominal amounts I ④

=
like ten rupees or even ten paise. c
6) Damages for deterioration caused by delay

=
in transit:
=
Such damages are recovered for damages or

*
0 ways
.
delay by carriers
of special
loss
Physical tortoise
damage
7) Remote opportunity
or indirect damages:
Notrecoreiable
dif
Are they recoverable?
Example: Generally (special )
Railways .
damage
800
Doctorbi NOT
1000
"

recoverable .
?⃝
act -
( future ,
unlhtain ☆
steps Event
Unit 6: Contingent and Quasi Contract
,
steps Performance .
Independent)
MEANING [S 31] ESSENTIAL ELEMENTS 0
RULES REGARDING ENFORCEMENT
depends on
1. The performance of the 1. Contingent Contracts Dependent on the
uncertain
contract is a contract must be conditional [S 32]
events .
=
contract to do/not If event happens- Contract is _________

to do something, if upon uncertain
_________________________ enforceable
If the event does not happen/ becomes
;
event
some event addnal impossible
.
f-
collateral to such 2. The event must be uncertain
unenforceable
Contract is ________
contract does or separate
.
=
,
independent may / not -

may f Future Uncertain Event [S 33]
happen
_________________________ .
unenforceable
If event happens- Contract is _________
certain = Notcontg
.
.
m m
If the event does not happen/ becomes

Example: 3. The uncertain event must be
¥mrs
impossible ¥4
collateral to the contract
enforceable
✗
=
Contract is ________ ✗ return
strip
-6
separate independent3. Contingent Contracts Dependent on future
[ ¥ty !
'
formpartof
_________________________
Not
contract .
conduct of a living person [S 34]
enforceable
If person acts accordingly- Contract is ____
tire•u①
-
4. Contingent contract must not If person acts otherwise, Contract is _____

be the mere will of the promisor unenforceable
② event =
4. Contingent Contracts Dependent on the
) eg
swill
pay ifs
Happening or Non-Happening of Specified
⑧ Perf
-
Uncertain Event Within Fixed Time [S 35]

like ________________________________
feel
5. Contingent Contracts Dependent on
impossible event
A
#B
E.ae:7?F.Tvoidab.-lbylaw-)
Quasi Contract
MEANING TYPES OF QUASI CONTRACT

It is an implied 1. Supply of Necessaries to incompetent
=
4. Responsibility of Finder of Goods
contract. persons [S 68] [S 71] acts # Bailee
Minor Rights:
It is based on the
principle of property of
2. Right to recover money paid for another a)
Right oflienctosetain )
reward
b)
person [S 69]
landon c) Right to sue
for .
Conditions:
€ É(④ave① Right
unjust to sell
enrichment at the Value
G0r¥pase (expenses __ 2/3 of)

Goods .
, 5. Payment of Money or Delivery of
?ms%Re
Goods by Mistake or under Coercion
#*
* 3. Claim for benefit received under a non-
gratuitous act [S 70] [S 72] =
É#
used A - B
t☒④ ←
Auth .
Quasi £ tZTᵈ Quasi

?⃝
Chapter 2- The Indian Partnership Act, 1932

Unit 1: General Nature of Partnership
INTRODUCTION:
15+04-1932
- Introduced on ______________________
- Applicable to ___________________________
whole India
of
contract Act
- Earlier a part of _______________________________
Capt
DEFINITION OF PARTNERSHIP [S 4]
Partnership is the relation between persons who have agreed to share the profits of the
=
I
-
2
Min: _____
*
No business 50
Max: _____ P'ship deed PSR/
No
P' ship Toral
equal
OR Mutual
Profit or Non-profit business?
written is bound
agency
' ✓
Not
p ship
.
: No business
•
P' [ Principal
ship -1
DURATION OF PARTNERSHIP
Agent?unbind
other
PARTNERSHIP AT WILL [S 7] PARTICULAR PARTNERSHIP [S 8]
partners
Ñara
=
venture
fined
Duration: _______________________
Not .
Formed for: _____________ or ______________
Duration: ______________ or ______________

by
Notice 'm
Dissolution: ____________________
writing
-
⑨ What if Continued afterwards? __________________
Tmpletionof
Notice to: _____________________
other
partners
his intention to
of Dissolution: ____________________ venture
dissolve the
firm
TYPES OF PARTNERS
Fined p'ship -
fined
duration
.
ACTIVE PARTNER SLEEPING PARTNER NOMINAL PARTNER PARTNER IN PROFIT ONLY
Meaning: _______ Meaning: _______ Meaning: _______ Meaning: ____________
_______________ _______________ _________________ ____________________
Liability? Liability? Liability? Liability?
For video lectures visit: www.theorymasterslearning.com

action / silence
SUB PARTNER PARTNER BY ESTOPPEL / HOLDING OUT
pastconduct
)
= =
Meaning: _____________ Meaning: ________________ or _________________
active
rep .
tacit
xp
.
Yes
ioL¥Q①
Liability? Liability? ____________________________________
×→s
.
A
×'
⑤
10L
partner sub '
EÉdit % .
_
✓ of MINOR AS A PARTNER
☆ =
CONDITIONS FOR ADMISSION
consent all partners

of
a) ______________________________________________________________________________
admitted to
benefit of firm
b) ______________________________________________________________________________
must be in evidence
partnership
c) ______________________________________________________________________________
0
RIGHTS AND LIABILITIES BEFORE MAJORITY RIGHTS AND LIABILITIES AFTER MAJORITY
SP (B) FS WHEN MINOR ELECTS WHEN MINOR ELECTS •

NOT
TO BECOME A PARTNER TO BECOME A PARTNER
profitratio
share in 1) Rights and Liabilities
1) SP- _______________________
in the
agreed same same upto dtof
books alcs
2) B- ________________________
-
.
public Notice
↳ ( Gm)
2) His Liability??
Cite asuit]
3) FS- ________________________
✗ share in
profit personally same uptodtof
liable
severe his
d-
of public
-
Only when _____________________

Notice
connections with 3) Share in Profit and Property
the
firm same
Same .

36
Unit 2: Relation of Partners
RIGHTS OF PARTNERS DUTIES OF PARTNERS PARTNERSHIP
1) Duty of good faith PROPERTY

1) Right to take active part in conduct of the
÷
business 2) Duty to carry on the firm business to the

2) Right to be consulted greatest common advantage
I f
Fundamental all partners
Matters_________________ 3) Duty to render true, accounts
- majority
Ordinary Matters ____________________
3) Right to remuneration → mentioned in 4) Duty to give full information
.
deed
cannotÑaimed as a
__________________________________ 5) Duty to indemnify for loss caused by
4) Right of access to books matter of
5) Right to share profit
right fraud (Scan the QR Code to
watch a video on
6) Duty to attend diligently
partnership property)
________________
PSR equal
; ________________ 7) Duty to share losses
6) Interest on capital
→ deed
8) Duty to account for personal profits
only
__________________________________
deed1@6i.pa
7) Interest on advances__________________
@
(a) Personal profits from any transaction of
the firm.
8) Right to be indemnified → compensated
-
(b) Personal profits from the use of the
__________________________________ property of the firm.
(c) Personal profits from the business
9) Right to stop admission of a new partner
connection of the firm.
fall
__________________________________
10) Right to retire, dissolve the firm
-
_
(d) Personal profits from the use of the
name of the firm.
Notice
Partnership at will ___________________ However, the above duty is subject to a
= contract between the partners
Particular Partnership consent #of
________________
9) Duty to account for profits of a
competing business
11) Right not to be expelled [Section 33]
customers
- - -
_________________________________
for firm.
12) Right of outgoing partner
[Section 36]________________________
✗
✗ firm name
repas✗ partner
_________________________________
solicit
÷
[Section 37]______________________
7-
If settlement is not done then?
"•
NOTICE TO ACTING PARTNER [S 24]
shareofprofit@Gy.pa -
RELATION OF PARTNERS WITH THIRD PARTIES [S 18] Hatice to

Notice to acting partner =_________________
firm
mutual
Agency
The relation is governed by ____________________
=
Except, in case of _______________________
outsiders
But this is only for transactions with _____________
and not forinter
transactions _______________________
-
se .
Ñ②TP
± For books and video lectures visit: www.theorymasterslearning.com
IMPLIED AUTHORITY ☆ Theory as .
(Authority means the right of a partner to bind the firm by his own acts.)
EXPRESS AUTHORITY IMPLIED AUTHORITY [Section 19]

=
The authority which is Meaning: Authority arising by implication of law

expressly given to a
partner by the agreement Acts within the implied authority
of partnership is called
1-
1) To purchase goods of the kind used in business of the firm;
I
2) To sell the goods of the firm;
3) To settle accounts with the persons dealing with the firm;
4) To receive payments of debts due to the firm and issue receipts for the same;
5) To engage servants for the business of the firm;
E-
6) To engage a lawyer to defend an action against the firm;
7) To borrow money for the business;
8) To pledge movable property of the firm;
9) To draw, accept, endorse BOE and other negotiable instruments.
-
Restriction on implied authority of partners

Restriction may be a) statutory b) imposed by mutual agreement
Statutory restrictions
Implied authority of a partner does not empower him to the following acts,
namely-
1) To submit a dispute to arbitration relating to the business of the firm
2)
3) To compromise or relinquish a claim or portion of the claim by the firm
4) To withdraw a suit/proceedings filed on behalf of the firm
5) To admit any liability in a suit/proceedings filed against the firm
6) To acquire immovable property on behalf of the firm
7) To transfer immovable property belonging to the firm
8) To enter into a partnership on behalf of the firm
Is the Firm Liable? __________________________________________
What if Third party was not aware of the restriction?

Firm # liable
-
=
_________________________________________________________________
oo0
Partner = liable
✗ " Restrictions imposed by- mutual agreement?
What if third party is not aware of the restriction?
liable
Firm is_______________________________________
¥* What if third party is aware of the restriction?

NOT liable
Firm is_______________________________________

?⃝
?⃝
LIABILITY OF A FIRM AND ITS PARTNERS TO A THIRD PARTY
tort
¥bñbed ¥ÉÉauth)
CONTRACTUAL LIABILITY FOR WRONGFUL ACTS OF A PARTNER
LIABILITY
clerk 100,000
1) For the acts of the
Wrongful Wrongful Act of partner is Wrongful Act of
=
firm Act
= of beyond his authority and partner is beyond his
(i.e acts of partners) partner other partner have ratified it authority
#
&
within his
___________________ authority firm #
judgement
Cafltldissoln )
ratified
Firm is always liable for
all the acts of partners
which are within their Who is liable?
authority
Partner liable
_______________________
-
Who is liable?
.
Tim liable
______________________________
-
00
LIABILITY FOR MISAPPLICATION OF MONEY OR PROPERTY BY A PARTNER
Where money or property is Where money or property is received by

received by a partner and then the firm and then misapplied by any of
misapplied by the same partner. the partners. P
Example:
✗ Y②→dr
Example:
✗ Y④Ñes
i. ↑
= -
-
-
-
-
- -
Who is liable?
Jinn
____________________________

let s study few other provisions

ADMISSION OF PARTNER INSOLVENCY OF PARTNER
all
.iq adjudication
partners
With consent of? _______________ Effects?
= C - ceases to be a
partner
____________________________________
Liability? D - dissolution
___________________________________
of firm
unless
,
otherwise
agreed
.
NO
a) Acts before admission__________ Liability?
)
______________________________
viable
only if
there is an
agrm ]dt of adjudication
_________________________________
_______________
Yes
b) Acts after admission___________
___________________________________ Public Notice Required? ____________________
☒⑤
n
EXPULSION OF PARTNER
Conditions? Example? .
power → agreement faith

____________________________________________
④(☒ no
id
benefit of firm / good
____________________________________________
+
____________________________________________
to be served
Notice
of expulsion injured
expulsion
Good Faith?
consent
→
of majority Is Public Notice Required?
Notice
____________________________________________
• Yes
________________________________
.
firm
____________________________________________
benefit of
heard
____________________________________________
app of being
•
.
EFFECT OF CHANGE IN CONSTITUTION OF FIRM

ON CONTINUING GUARANTEE [SECTION 38]
DEATH OF A PARTNER
Dissolution? Yes / No
Casper act> (Scan this QR Code for Video on continuing guarantee)
If agreed not to dissolve, then will
the firm be dissolved upon death? Effect of change in change in the constitution of the firm
Yes / No on continuing guarantee
cashier
Will the estate of deceased partner Example:
be liable for
☆ Yes / No constitution Guarantee
☐
↓
end .

Unit 3: Registration of Firm

Registration means getting the partnership firm registered with the Registrar of Firm of
the area in which the place of business of the firm is situated or proposed to be situated.
NO
Is registration compulsory? _______ Is there any penalty for non-registration? ________
NO
disabilities
= anytime
When can firm be registered? ____________ Then? ________________________
☆ lls
Theory
.
CONSEQUENCES OF NON-REGISTRATION [S 69] NON-REGISTRATION DOES NOT AFFECT

-
1) No suit by partner against the firm or
I
1) The right of third parties to sue the firm or any
partner
- -
other partners
2) No suit by firm against third parties2) The right of partners to sue for the= dissolution of the
3) No right to claim set off in excess of firm for the settlement of the accounts of a dissolved
firm, or for€realization of the property of a dissolved
firm. Jinn - DR
Example: u¥f
Firm # ✗ 3) The power of an Official Assignees, Receiver of
sell
Court to release the property of the insolvent partner
Toooo and to bring an action.
Registered
£90k
firm
→
4) The right to sue or claim a set-off if the value of suit
pay
play
Not
og → Ell E
Dissolution of Firm
DISSOLUTION OF PARTNERSHIP DISSOLUTION OF FIRM
Change in the existing relations of Means dissolution of partnership between all the
the partners
-
J
Old partnership _______________
partners of the firm
ends
Old partnership _______
does not come into
begins
New partnership ______________ New partnership _____________
existence
Does business continue?✓

Yes / No Does business continue? Yes / No
MODES OF DISSOLUTION OF THE FIRM
I }
Without order of court By order of court
- By mutual agreement - Insanity of a partner
- Compulsory dissolution - Permanent incapacity
- On happening of certain contingencies - Misconduct
- By notice - Persistent breach of contract
- Perpetual losses
- Transfer of whole interest in partnership
- Any other just and equitable ground
e-
RETURN OF PREMIUM ON PRE-MATURE DISSOLUTION [S 51]
Goodwill
Goodwill
←
⑦¥
admission
≥ YZ
÷ to
years
.
dissolved after
6
years
.
agrm reasonable roportiouate

time
Igraine
-
aunt
LIABILITIES FOR THE ACTS DONE AFTER DISSOLUTION:

On the dissolution of a firm, partners have to give a0 public notice of the dissolution. If it
is not given, the partners shall remain liable to the third party for their acts done even
after the dissolution of the firm
SETTLEMENT OF ACCOUNTS [SECTION 48, 49 and 55]

Sources ?
a) Treatment of losses
capital partner's
First out of_______, Then out of ________ and lastly out of ________ assets
profits
b) Application of assets
Firstly pay _______, p' loan
outsidersthen ____________, capital
then _____________ distribute
and lastly _________
surplus among
(firm's debts
to outsiders ) partners

MODE OF GIVING PUBLIC NOTICE [S 72]
D-
REGISTERED FIRM UNREGISTERED FIRM
-
1) _________________________
newspaper
.
newspaper
1) ____________________________
official Gazette
2) _________________________ official Gazette
2) _____________________________
ROF
3) _________________________
PUBLIC NOTICE
REQUIRED NOT REQUIRED
Dissolution
1) _________________________ Death
1) ___________________________
Retirement
2) _________________________
insolvency
2) ___________________________
Expulsion
3) _________________________
4) Minor's decision

Chapter 3- Sale of Goods Act, 1930 ownership

Cross / Risk]
Unit 1: Formation of Contract of Sale
The Sale of Goods Act came into force on 1st July, 1930
-
This act extends to whole of India

+
This law was previously part of Indian Contract Act, 1872 crypt
Where the Sale of Goods Act is silent on any point, the Indian Contract Act is applicable
=
DEFINITION [Section 4(1)] ESSENTIAL ELEMENTS OF CONTRACT OF SALE

-
1) Essentials of a Valid Contract
Contract of sale of goods is a 2) Seller and Buyer
①contract whereby seller ←
→transfers or agrees to transfer pants
_______________________ _______________________
[ sal)
the property in goods to the
#
buyer for a price ownership
3) Transfer of Property
-
ownership
Meaning of Property: ______________________________
Sale: ___________________________________________
immediate
future dt /
Agreement to sell: ________________________________
contract
of fulfilment of
conditions
certain .
- 4) Goods
¥0,1930 TA 1882
-
fate
Agrmtosell Movable Property / Immovable Property?
Includes Does not Include
ownership
•
ownership movable property immovable property
tgf ,
actionable claims
trfd old
5) Price
- Rare coins
money
immediately future
"
loud monetary consideration
Meaning: _______________________________________
dt Goods for Goods: ________________________________
Barter ✗ sale
No consideration: ________________________________
Gift ✗ sale
Partly goods, partly money: ________________________
✓ sale
6) No formalities to be observed
✓/ Oral
Writing ✓/ Partly oral, ✓ Partly Written?
Payment
Jimmi
future dt ,
instlm
Delivery 1) )) ))
SALE AGREEMENT TO SALE

Ownership is transferred @ future dt
Ownership is transferred ___________________ or
________________________
immediately
________________________ Example: fulfillment of certain condns
________________________________________ .

provided
.
TYPES OF GOODS if /
☐
EXISTING GOODS FUTURE GOODS
☐ CONTINGENT GOODS
☐
in existence
acquired in possession
tobemfdiproduud happening uncertain
/ happy Non
future of future
>
in
of seller .
event
tB_
ASCERTAINED ☆•→speaficGoodc_
#
UNASCERTAINED
identified @ time of
up)
GOODS GOODS
Is Money Goods? Contract
Notes:
Meaning: Meaning:
identified NOT
identified Old and Rare coins
agreed
' '
after
formation
' '
out
of
of of ⑤bags
contract
5 out
A) set aside .
EFFECT OF DESTRUCTION OR PERISHING OF GOODS
IN CASE OF CONTRACT OF SALE IN CASE OFf-

AGREEMENT TO SELL
[SECTION 7] [SECTION 8]
TIME .
* aid
Contract is _____________
before
Goods perished ________ contract of sale
aftaagrm
Goods perish _______________but before
____________________________________
sale
✗
contract
of .
Conditions:
a) ________________________________
specific goods ✗aware a) Perishing of Specific Goods- Agreement is
.
b) _______________________________
wfout fault of
destroyed seller #
void
____________________________________
.
c) ________________________________
damaged
✗ ans -
description
sale
contract
of b) Perishing of Future Goods- Agreement is
.
void
____________________________________
PRICE OF GOODS [S 9 and 10] c) Perishing of Unascertained Goods

☆
1) It may be fixed by the parties to the
valid
☆____________________________________
✗ y .→
Ergs
contract. ofout
bags
soo
2) The price may be fixed in a manner
provided in the contract of sale.
eg
valuer
formula goods
.
-
.
3) It may be determined by the course of delivered

dealing between the parties reasoned price =
Batan:-&
-
-
.
.
-→y
4) Fixation of price by a ↳
third party ×
②⑥TP .

Unit 2: Conditions and Warranties

__-_
CONDITIONS [S 12(2)] WARRANTY [S 12(3)]
Meaning: essential to the Meaning: collateral
contract
main
Breach: purpose of Breach: claim
↳ Terminate contract damages .
claim
damages
Price (
if pai *
IMPLIED CONDITIONS
☐ IMPLIED WARRANTIES
1) Condition as to Title 1) Warranty as to quiet possession
E-
o r
Assumption: _________________ Assumption: _____________________
2) Condition in sale by description 2) Warranty as to free from encumbrance #

goods Fpu description ?
seEvity
Assumption: __________________________
charge /
Meaning: _____________________ Bank .
equality)P°b④☐
3) Condition in sale by sample TTP
3) Disclosure of dangerous nature of goods
goods Euryale
Assumption: __________________________
__________________________________
Buyer =
app to
inspect goods
.
inherently
Alllll
inform
dangerous
Meaning: ____________________ .
4) Warranty as to quality or fitnessBuyer

✗ hidden
4) Sale by Sample as welldefect
.
as by description by usage of trade

_____________________________
Foods
=
_ _
Assumption: ___________________________
( sample +
description)
5)-Condition as to quality or fitness
%°wyeÑfw%
Assumption: ___________________________
NO condition
Exceptions: CAVEAT EMPTOR exam
.
Buyer =
purpose known to seem
a) __________________________
Meaning: _______________________
b) __________________________
Trade mark /
patent name
{§° 1
c) __________________________ Exceptions: " ""
1) Buyer makes purpose known to seller
6) Condition as to merchantability and relies upon skill and judgement of
to be sold
Meaning: _________________ seller
fittradable
Assumption: _________________________ 2) Contract of sale by description
3) Contract of sale by sample
7) Condition as to • .
wholesomeness 4) Goods bought both by sample as well as
fit for human
Meaning: ____________________________
consumption by description
5) Sale by merchantable quality
8) Condition implied by ☐
Custom 6) Actively concealment of defect by seller
___________________________________
Arlen
7) Condition or warranty implied by usage
Conyer's of trade
8) Goods purchased under brand name

Unit 3: Transfer of Ownership and Delivery of Goods

Transfer of Ownership RULES:
=
Transfer of ownership of specific or ascertained goods
-
[Section 20] =
Meaning:
generally @ contract / intention
owner = loss = risk Ownership is transferred at the time of making contract
=
Conditions:
giodsenistmg
}
•
-
)
__________________________________________
specific
Importance of ownership: __________________________________________
deliverable state
seller
•
________________________ ✗ conditional
__________________________________________
Risk
soobags
•
.
• ________________________
Price
________________________
Ownership is transferred at some other time
a) Where goods are to be put in deliverable state by the seller
e
☒
•
trf a
third
good title to = -
x -
⑦ loobags.LT
party putin deliverable state # know'?MM
___________________________________________
buyer =
about this
b) Where goods are in deliverable state but are to be weighed
or measured by the seller ④ y
loud 's -
-
satisfied bright knows about

this
Transfer of ownership of unascertained and future goods
= =
[S 18 and 23]
Meaning: _______________________________________
When is ownership transferred: ¥0M
Slept →
Ascertainment of goods: identified
Appropriation of goods: ←
our
of
step 2 two
# set aside
bags
.
☆RESERVATION OF RIGHT OF DISPOSAL [S 25]

The seller may like to retain the ownership of the goods until some later date, e.g., until the
-
price is paid◦ =
or some conditions are fulfilled. The seller may do so by reserving his right of
disposal. )
[ ship Beading
@
Assumption as to right of disposal .
_
-
-
-
-
-
fail ways (121-2) Agent
In the following two circumstances the seller is presumed to have reserved the right of
.
disposal :
__- buyer
2) By sending the bill of exchange for the price, to the buyer, along with the documents of
=
.
title = =
ˢ% #¥iÉuyu☒
=
#
A- honours the bill
☆
Theory
-
B
S -
RISK PASSES WITH THE OWNERSHIP [S 26] C)

The risk and the ownership of the goods go together. In other words, the goods are at the
risk of the party who has the ownership of the goods. owner Risk
# owner # Risk
=
Exceptions:
a) Agreement between the parties: The risk and the ownership may be separated by an
agreement between the seller and the buyer. s → Erisa
)
b) Goods are at the risk of the party in ⊖
default of delay
c) ☐
Trade customs : The risk and the ownership may also be delayed
egseparated delivery
by the trade customs
B
TRANSFER OF TITLE [SECTION 27-30]
s
☒
→
☒
- - No one can
give what he has not ____
EXCEPTIONS 5.
☒
→
Bow
got
1) Sale by Mercantile Agent ✗
-
④
④
2) Sale by owner by estoppel
=
3) Sale by one of the joint owners

Y②☒ A #
✗
→
4) Sale by person in possession under voidable contract

☆ valid
× ( voidable
)=can#-
gofgl.tn valid
5) Sale by seller in possession after sale
goofiÉÉ ¥
"
6) Sale by buyer obtaining possession before property in goods has vested in him
ˢsetÉgood
7) Sale by unpaid seller ☒ # faith
8) Sale by an official receiver or liquidator of the company will give the purchaser a valid
¥liquidatoro①ds¥
-
É
title. '
valid
9) Purchase of goods from finder of goods will get a valid title under certain circumstances.
I I
sell
€8
10) Sale by pawnee or pledgee under certain circumstances
TP
=
0*17
valid
Gold chain £
30000 Pledgee 50,000

212)
DELIVERY OF GOODS
Meaning: Delivery means voluntary
________ transfer of ___________
possession by one person to another.
Delivery may be of three kinds:

delivered
a) Actual Delivery - __________________
✗ ¥ →
≤ acknowledgement
b) Constructive Delivery - __________________
c) Symbolic Delivery- _______________________
symbol real
effect of ⑧ .
jm
of possession
.
RULES OF DELIVERY
1) Effect of =
part delivery eg keys holding
Delivery of whole __________________________________________
Intention Delivery of0 del what
part ____________________________________________
as
if
-
60t
⇐
✗
2) Buyer to apply for delivery
-
too units .
3) Place of Delivery
Piaa
a) Place is specified- ______________________________________________________
b) Place is not specified- ___________________________________________________
reasonable place .
4) Time of delivery
@ time
a) Time is specified- ______________________________________________________
b) Time is not specified- ___________________________________________________
@ reasonable place .
5) Goods in possession of third party

a) Instructive
delivery
Third party acknowledges- _______________________________________________
eg
.
# doc
of
symbolic delivery
b) Document of title- ______________________________________________________
title
6) Expenses of delivery
?
Expenses of putting goods in deliverable place shall be borne by ___________________
seller
- _
7) Delivery of wrong quantity 100 units order

=
reject seller Balance

Buyer __ accept
Short delivery - __________________________________________________________
☐ =
.
v00 _=IÉ¥ whole

Excess delivery- _________________________________________________________
Buyer ear accept contracted Qty Reject rest
①
Mixed delivery- Bryer
__________________________________________________________
-
accept contracted
NOTE: If buyer rejects the whole quantity of goods delivered, the contract is
.
subsisting existing Vaʰ £

_______________________________________________________________________
, ,
8) Instalment delivery - ____________________________________________________
-
on
if agreed
Delivery to
buyer
9) Delivery to carrier- _____________________________________________________
=
-
Normal loss ( incidental to course

10) Deterioration in transit- _________________________________________________
= of
Buyer
Unit 4-@
Unpaid Seller Sn 45
price ( ✗ paid I tendered )

Meaning: ____________________________________________
whole
BOE
Chq ( dishonoured )
____________________________________________
,
☆
RIGHT AGAINST THE GOODS
RIGHTS OF UNPAID SELLER
RIGHT AGAINST THE BUYER PERSONALLY
Theory
= =
1) Right of lien [Section 47 49] 1) Suit for price [Section 55]

Meaning: ___________________________
to retain 2) Suit for damages for non-acceptance
[Section 56]
Conditions: 3) Suit for damages for repudiation of
Ésion
contract [Section 60]
insolvent
___________________________________
___________________________________
✗
buyer seven
unpaid 4) Suit for Interest [Section 61]
___________________________________
≠ paid price
buyer
Lien is lost when:
___________________________________
bailee
✓
___________________________________
buyer
✓waiver
___________________________________
2) Right of stoppage in transit [Section 50 to 52] carrier

*eller -
___________________________________
Conditions: ( in transit)
seller is
unpaid
___________________________________
•
___________________________________
insolvent
Buyer
◦
=
goods are in transit

___________________________________
•
___________________________________ seller → parted with

foods
with carrier
possession
• -
Transit comes to an end:

bingaafhttaues delivery
___________________________________
___________________________________
carrier ache =
after
Constructive delivery
___________________________________ before reach the destination
Cavill
___________________________________
wrongfully refuses to del to
goods buyer
'
3) Right of resale
Conditions:
goods perishable
___________________________________
= .
to
___________________________________
notice
given buyer
-
___________________________________
( Notice ✗ required )
agrm
AUCTION SALE
Meaning: ______________________
auttionllr
Person who sells goods on behalf of owner is known as __________________________
auctioneer is that of ___________ and __________
Relationship between owner and ____________
Advertisement for auction is invitation to
_______________________
principal
Bidder
agent
Offer?_____________________
Acceptance?____________ hammer
offer
striking of
RULES REGARDING SALE BY AUCTION
1) Sale by Lots
sale
Each
of
___________________________________________________
separate contract
=
2) Completion of sale
hammer
fall of
___________________________________________________
selloffpuffers
3) Reservation of Right to bid
)
____________________________________________________
4) Reserve Price
upset price minimum
aka____________________________________________________
, price .
5) Knock-Out Agreement
=
valid = in
only if
____________________________________________________
good faith
INCLUSION OF INCREASED OR DECREASED TAXES IN CONTRACT OF SALE
Before performance of contract, in absence of an agreement to the contrary
Taxes Increase, Then Price will ____________
Taxes Decrease, Then Price will ____________

Chapter 4- The Companies Act, 2013

Unit 1: Introduction
official
th
Gazette
The Companies Act, 2013 came into force from 30 August, 2013
The Companies Act, 2013 extends to the =whole of India.
As per Section 2(20)
- -
C
]
incorporated under this Act or under any previous company law.
=
2013
CHARACTERISTICS OF A COMPANY
1) -0
Artificial person created by law
can be sued
-
2) Separate Legal Entity own property can sue

, ,
on
Meaning: from members
______________________________________________________
separate
+ distinct
Case Law: ____________________________

Solonian ✓ Salaman
Doctrine: ____________________________personality
of corporate
Doctrine
veil
corporate
3) Perpetual succession
(Scan for Video Lectures on Companies Act)
}
legal representative
Death: ________________________________
official Receiver / Assignee
Insolvency: ____________________________ Transmitted
Insanity: _______________________________
Guardian
4) Common Seal
signature of co
Meaning: _____________________________________________________________
officialNo
.
optional
Is it mandatory? ________________________________________________________
it is
2 Directors
/
If common seal is not affixed then? _________________________________________
1 Director
CS
5) Limited Liability ✓ Sh cap→ aint

unpaid on Shs
- - / aint of guarantee
Guarantee - ✗ su cap
BY Shs
By ↳ aunt of guarantee
(@ winding up )
ltd
guarantee
aunt
to
of
Ho @ ommatvahul
FU ]ÉaE÷
6) Free Transferability of shares
NO Yes
Private Company? __________________ Public Company? __________________
.
7) Management
BOD ?
✓
Ownership ________________________
Members Management ______________________

smote
Lifting of corporate veil
.
=
#
.
Introduction Key Words:

① Meaning of cosy veil 3 points
_________________________________________________________________________
, -
_________________________________________________________________________
② Meaning of of torp veil -3 paints
lifting
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Minimum -2-1000 CR
Circumstances where corporate veil is lifted
=
App In -2-60 CR
=
↳
1) Failure to return application money [Section 39]
Minimum amount of subscription is _______________
not subscribed and _______________________
amt receivable on app In
is not received within 30___ days, then the amount shall be returned within 15 __ days from
15% p.ae
closure of the issue, else it shall be returned along with interest @____
2) Misdescription of Name [Section 12]
get0r
Name is not mentioned
-
Name is not properly mentioned
'
Foos .
3) For determining character of the company actual Name -
LAR
Agencies
j£
Case Law: Daimler Co Ltd. v Continental Tyres and Rubber Co.
↳Enemy co .
Ltd .
4) Arrears of tax
Form to avoid tax
Company
Who is liable to pay tax?______________ .
a co →
(Case Law: Sir Dinshaw Manekjee Petit)☆
5) When a company is formed to avoid welfare laws

Case Law: CWorkmen Employed in Associated Rubber Industries Ltd., Bhavnagar vs. The
Associated Rubber Industries Ltd., Bhavnagar]
the
beyond powers ←EotyM
-
Garment co
.
→
6) Ultra Vires Act
Director
Who is liable? _______________
7) Where company is a sham or Hoax co is

formed to hide
wrongful
action
Case Law: Gilford Motors CO Ltd., v Horne
.
8) Where company is formed to act as an agent of its members

Tnembess
- _
Principal? Agent?
,mq
.
any
-
@ reliable

→◦
◦" ?
Unit 2: Types of Companies
0
]
death
incapacity )
I) Classification on the basis of members member
→ ↓
,
1) One Person Company @ expected) Nominee (member)

It has only one person as a member who will act in the capacity of a director as well as a
- 1
shareholder.
- (Named in MOA )
Qualification of Member and Nominee ☆
@ days] whether
o
m* ______________________,
Natural
person ________________________,
Indian
citizen
resident in India / Not
______________________
No person shall be eligible to incorporate more than one OPC or become nominee in more
than one such company. 2Mem#r 2¥ee
Tv ommee in another OPC
Yes ✓ Member in IOPC
days
member ( dies ) -
180
choose
OPC should get itself converted into a Private Company or Public Company within 6
months if:
(i) Paid up capital exceeds ____________; or
(ii) Where the average annual turnover during the relevant period exceeds __________
Voluntary Conversion: _____________________________________________________
2) Private Company [Section 2(68)]

Restrictions:
{
a) _____________________________________________________________________
Transferability Jt holders
=L -
✗ employees
b) _____________________________________________________________________
Max zoo
_
Prohibition
c) _____________________________________________________________________
public offer
-
No restrictions then? ________________________

deemed
public G- .
2
Minimum Members: ______ Maximum Member: _______
200
Minimum Directors: ______

2
✗ ltd
←
3) Public Company [Section 2(71)] Ptd .
A public company means a company which is not a private company subsidiary

What about@private subsidiary of a public company? ______________________
_
deemed public co .pt/hfpvtco
7
Minimum Members: _________, Minimum directors: ________,
3 Maximum Members:
_________________________________________________________________
No limit

II) Classification on the basis of Liability

1) Company Limited by Shares [Section 2(22)]
A company limited by shares is a company in which the liability of its members is limited
by its Memorandum to the amount (if any) unpaid on shares.
2) Company Limited by Guarantee [Section 2(21)]
3) Unlimited Company [Section 2(29)]

It is a company in which the liability of the members is not limited by its memorandum.
Dmp for
exam
III) Classification on the basis of control (DVR)
☆1) Government Company [Section 2(45)]
voting
power
-
A government company means any company in which at leasto 51% of the -

paid-up share
capital is held by Bharat Sankar ltd
eg ↓ Nigam
Central Government, or by
100% owned
any State Government or Governments, or subsidiary ltd
Mahanagar
partly by the Central Government and partly by one or more Telephone Nigam
State Governments,
and includes a company which is a subsidiary company of such a Government company. ↑
☆ deemed as
co
Govt
-
a
2) Foreign Company [Section 2(42)] ☆ Defn
-
Foreign company means any company or body corporate incorporated outside India
which
(a) has a place of business in India whether by☐ itself or through an ☐
agent, ☐
physically or
through -electronic mode; and
(b) conducts any business activity in India in any other manner.
3) Holding [Section 2(46)] and Subsidiary Company [Section 2(87)]

In relation to any other company (i.e. holding company) a subsidiary company means a
company in which the holding company- Hss
(i) controls the composition of board of directors or
=
(Hts6→¥ s ,
(ii) exercises or controls more# than half of the total voting power either on its own or
=
together with one or more of its subsidiary companies.
IMP: A company shall be deemed to be a subsidiary company of the holding company
even if the control is of another subsidiary company of the holding company. S , Sub =
H
TH § of H .
Bud boy
Associate Company [Section 2(6)] A
.
,
Associate 6) St
In relation to another company associate company means a company in which that other
company has a [ ] but which is not a subsidiary company of the company
significant influence,
having such influence and includes a joint venture company (JVC).
↳ Joint
arrangement whereby the pasties
that have have
joint control of the
arrangement
rights to the net assets

of
the
arrangement
means control of at least 20% of the voting power or control or

participation in business decisions under an agreement.
-
is retired ?
IV) Other Types of Companies windup .
1) Licensed company or Association not for profit [Section 8] CG

/_
Purpose amalgamate
promotion of art science , culture envt education religion
___________________________________________________________________
•
,
, , ,
___________________________________________________________________
•
profit applied for objects
___________________________________________________________________
•
prohibits payment of dividend .
@
ctltdlpvtud
Name .
]
2) Small company [Section①
☆ 2(85)] In case of Revocation
Small company means a company, other than a public company,
[↑ prescribed ] and
a) whose paid-up capital does not exceed ________________________________;
-250L
E
b) whose turnover as per profit and loss account for the immediately preceding financial year
ZZCR
[ ↑ prescribed]
does not exceed _____________________________________________________
Chiles] ZZCR
Exception: This section shall not apply to £20K .
i) Section 8
____________________________________________________________________
"°
"
ii) _____________________________________________________________________
Sith
Holding
C¥#u
scopvtud
.
-
iii) _____________________________________________________________________
Spl Acts
-
.
Unit 3: Formation of a Company

limit
PROMOTERS
As per Section 2(69), of the Companies Act, 2013, Promoter means a person who 5^9912
(a) has been Inamed as such in a prospectus or is ☐
identified by the company in the annual return
(b) has-control over the affairs of the company, directly or indirectly whether as a shareholder,-
director or otherwise; or
(c)-in accordance with whose advice, directions or instructions the Board of Directors of the
-
=
company is accustomed to act.
FORMATION OF A COMPANY [Section 3]

Number of persons required to form:
2 7 1
Private company: ________ Public Company: _________ OPC ___________
number reduced below minimum .
Section 3A:
_%th6m
.
4⑨aw severally
Public to -
6 months .
liable .

MODE OF REGISTRATION / INCORPORATION OF COMPANY

1) Reservation of Name Pvtltd Ltd OPC ( Pvt ) ltd,
.
Cio'd⑨p spice Part A- New Name -
g-
-
2) MOA and AOA → pastis -
Incorporation '
advocate .CA ,CS,CwA Ma CS

3) Other Documents to be filed ,
Director
,,nager
, ,
- declaration by persons engaged in the formation and by persons named in the AOA
- Address for correspondence
- A declaration from each of the subscribers to the memorandum and the first directors
-
- Details of Subscribers and Directors

4)cCertificate of Incorporationtf
,
5) Allotment of Corporate Identification Number (CIN)
5/6 Mks .
Furnishing of false or incorrect information or suppression of material fact at the time
¥ ᵗ ᵈʳ
of incorporation (i.e. at the time of Incorporation)
If any person
- furnishes any false or incorrect particulars of any information or
- suppresses any material information, of which he is aware in any of the registration
documents filed with the Registrar,
" """ " "
he shall be liable for action for fraud under Section 447.
-
Company already incorporated by furnishing any false or incorrect information or

representation or by suppressing any material fact (i.e. post Incorporation)
Where, at any time after the incorporation of a company, it is proved that
- the company has been incorporated by furnishing any false or incorrect information or
- representation or by suppressing any material fact or information in any of the
documents or declaration filed
or made for incorporating such company, or
- by any fraudulent action,
then the promoters, the first directors of the company and the persons making declaration
under this section shall
Cls
Theory
.
each be liable for action for fraud under Section 447.
Effects of Registration
1) Body corporate
2) Perpetual succession
3) Limited Liability
4) MOA and AOA when registered shall bind the company and its members

?⃝
of
W
property NOT members
5) Property of the company is ________________________________________________
liability
6) Any liability of the company is ____________________________________________
of lo Not members .
BOD
7) Management ___________________________________________________________
SHARES
As per Section 43, the share capital of a company limited by shares shall be two kinds only:
a) Equity share capital-
15 shares I vote
eg
i) with uniform voting rights, or
ii) with -
differential rights
- as to dividend, voting, or otherwise in accordance with such rules
and subject to such conditions as may be prescribed
b) Preference share capital

object purpose scope
,
HUT ?
,
→ ñ ?
→
Unit 4: Memorandum and Articles of Association
Regen
_
Rules
MEANING of Memoradum
,
Memorandum of a company is its charter; it defines its constitution and the scope of powers
with which it has been established under the Act.
The Memorandum of Association is a public document which is open for inspection by
any member of public on payment of prescribed fees [Section 399]
(Therefore, every person entering into contract with the company is presumed to have
knowledge of the contents of Memorandum.
of Hottie
(_______________________________________________________________)
Doctrine constructive
PURPOSE OF MEMORANDUM
shareholders / investors
Risk Oriented _____________________________________________________________
.
Object Oriented ___________________________________________________________

creditors ←
scope of
products / services MOA
=
-
CONTENTS OF MEMORANDUM
1) Name Clause
Prtltd
Private Company _______________________________
Ltd
Public Company ________________________________
.
OPC ( P ) Ltd
OPC ___________________________________
.

2) [
Registered Office Clause]
Books are maintained
Purpose: _______________________________________
Communication
State or Exact Address? State
, ,
meetings
Main Other (
Ancillary)
3) Objects Clause
The company shall state in this clause the objects for which the company is proposed to be
incorporated and any matter considered necessary.
4) Liability Clause
Limited ←
by
shares
________________________ or Unlimited
Guarantee
by
5) Capital Clause
and its ÷ → Details ( AoA)
Auth
______________________________________________________________________
cap
.
6) Association Clause
subs I share F
______________________________________________________________________
.
-
7) Name of Nominee in case of OPC
DOCTRINE OF ULTRA VIRES
beyond
Meaning: ________________________________________________________________
the
powers .
Case Law: Ashbury Railway Carriage and Iron Company Limited v Riche
Impact of ultra vires transaction

void at initio
a) ______________________________________________________________________
co ✗ liable ✓
officers , directors
b) ______________________________________________________________________
co ✗ sue ✗ be sued
c) ______________________________________________________________________
ratify
✗ ✗
,
ARTICLES OF ASSOCIATION
Key Words:
a) Rules and regulations
%
b) Regulate the [
internal management]
=]
c) Bye Laws of the Company

DOCTRINE OF INDOOR MANAGEMENT Constructive Notice .
=
-
ve doctrine .
Key words: co
protects .
Not outsiders
Constructive Notice
a) Exception to _____________________________
doctrine
of
.
b) This doctrine protects ______________

outsiders
_______________Rule
'
c) The doctrine of indoor management is also known as Turquands .
"
Read
Case Law: Royal British Bank vs Turquand ordinary Not
filed
with Roc
Spl Resol (Scan to watch a video on
Exceptions to the doctrine of indoor management
1) Knowledge of irregularity filed with Indoor Management)
Roc .
@ a- T -
14 ]
_______________________________________________________________
He
himself party to contract
= .
Case Law: Howard v. Patent Ivory Manufacturing Co., Morris v Kansseen

-
CoA -Dir
or
of
- -
- -
-
-
CoACo
.
2) Suspicion of irregularity
____________________________________________________________________
unusual
ordinary
Key words: Transaction is ______________________ not in the
or ______________________
course
of business
Case Law: Haughton & co v. Nothard, Lowe & Wills Ltd
Anand Bihari Lal v Dinshaw& Co.,
-
accountant
ˢTa%
3) Forgery Co cannot be held
liable
Nullity void ab initio
__________________________________________
-
-
-
for forgery
committed
by officers
.
Case Law: Ruben v Great Fingall Consolidated (Scan for Video Lectures on
=
Companies Act- Covers all
Case Laws in detail)
Rubber # Go .
f
tfoged sign
Dir )
relief ) of
@ ◦

Chapter 5- Limited Liability Partnership

p'ship +
Company → ltdliab
*nibihity
status
INTRODUCTION Sep
-
legal
succession
perpetual
Limited Liability Partnership (LLP) is an incorporated partnership formed and registered
under the Limited Liability Partnership Act 2008 with limited liability and perpetual
succession.
The Act came into force on 31st March 2009.
Key words:
- Body corporate
- Legal entity separate from its partners
- Indian Partnership Act, 1932 does not apply Cor 2 Mk)
Minimum and Maximum Minimum-___________

2 No limit
Maximum- __________
number of partners
Designated Partner Minimum- zicndividual )

___________of which at least one shall
residentincndia
be___________________
'
182
days .
Major duties of Designated Partner
⇐
- Notify any changes in the LLP's to Registrar of Companies.
⇐I
- Notify any changes in the Partners names & residential
addresses to Registrar of Companies.
- Notify any change in Registered Office Address to Registrar
of Companies.
- Filing of any Annual return, Statement of Accounts and other
documents specified under the provisions of LLP Act with the
Registrar of Companies.
- Statement of Accounts & Solvency to be signed by the
Designated Partners of the Company.
- To preserve and to produce before an inspector or any person
authorized by him in this behalf with the previous approval of
the Central Government, all books and papers of, or relating
to, the limited liability partnership or, as the case may be, the
other entity, which are in their custody or power
- Responsible for signing all the e-forms filed with the Registrar
of Companies.

-Stringent financial penalties are provided in LLP act for

procedural non compliances.
Relation of Partners - Shall be governed by LLP Agreement
[Section 23] - Change shall be filed with ROC.
- If there is no agreement then First Schedule shall apply
Cessation of partnership - by agreement
E
interest [Section 24] - by 30 days notice in writing to other partners
- he shall continue to remain liable till notice is given to third
=
party
Registration of changes in Partner- shall inform LLP of any change in his name or address
partners [Section 25] within a period of 15 days of such change.
LLP inform Registrar
a) Person becomes or within 30 days of change
ceases to be a partner
b) Change in name or within 30 days of change
address of partner
Partner by Holding out
[Section 29] representation as a partner, the LLP be liable to the extent of
credit received by it or any financial benefit derived thereon.
FEATURES OF LLP
É
1) Body Corporate
2) Perpetual Succession
3) Separate Legal Status
4) Limited Liability
5) Artificial Person
6) Common seal
7) No Mutual Agency
8) Accounts of LLP
9) E-filing of documents

2
Firm to LLP →
I
10) Conversion of LLP Pvt Coto LLP
→ 3
4
Unlisted public co to KEP -
#
11)
liability partnership formed, incorporated, or registered outside India which established a
-
. Foreign LLP can become a partner in an Indian LLP.
ADVANTAGES OF LLP
1) Organized
E-
2) Flexibility
3) Formation - Easy
4) Liability- Limited
5) Dissolution Easy
INCORPORATION OF LLP
1) Name [Section 15]
ROC
Application shall be made to ___________________________________________________ LLP
limited
liability Partnership ,/
Name shall end with _________________________________________________________
Name shall not be ___________________________
LLP
or _____________________________
Firm
undesirable identical with name
of Body
If it is then then the Central Government may direct such LLP to change its name and theCorp .
33
LLP shall comply with the said direction within ________months after the date of the
-
direction or such longer period as the Central Government may allow.
?
2) LLP Agreement
}
as
{
Contents of LLP Agreement
Theory
.
i) Name of LLP
ii) Name and address of Partners & Designated Partners
iii) Proposed Business
iv) Form of contribution & interest on contribution
v) Profit sharing ratio
vi) Remuneration of partners
vii) Rights & duties of partners
viii) Rules of governing LLP

3) A statement made by either an advocate, or a Company Secretary or a Chartered

-
-
Accountant, who is engaged in the formation of the LLP and by one who subscribed his name
to the incorporation document that all the requirements of the Act and rules in respect of
incorporation have been complied with shall be filed with the Registrar
4) If a person makes a statement as discussed above which he

(a) knows to be false; or does not believe to be true, shall be punishable with imprisonment
for a term which may extend to 2 years
WINDING UP AND DISSOLUTION [SECTION 63]

The winding up of a LLP may be either voluntary or by the Tribunal
Circumstances in which LLP may be wound up by Tribunal (Section 64)

(a) if the LLP decides that LLP be wound up by the Tribunal;
(b) if, for a period of more than six months, the number of partners of the LLP is reduced
below two;
(c) if the LLP is unable to pay its debts;
(d) if the LLP has acted against the interests of the sovereignty and integrity of India, the
security of the State or public order;
(e) if the LLP has made a default in filing with the Registrar the Statement of Account and
Solvency or annual return for any five consecutive financial years; or
(f) if the Tribunal is of the opinion that it is just and equitable that the LLP be wound up.

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THEORYMASTERS LEARNING CA FOUNDATION (BUSINESS LAWS)

THEORYMASTERS LEARNING CA FOUNDATION (BUSINESS LAWS)

Chapter 1- The Indian Contract Act, 1872

It applies to the whole of India.

CONTRACT= AGREEMENT + ENFORCEABLE BY LAW

goods services agm

For books and video lectures visit: www.theorymasterslearning.com

ESSENTIAL ELEMENTS OF A VALID CONTRACT [S 10]

3. Intention to create legal relationship =

B/c social / Domestic ✗ .

4. Free consent (Coercion, Undue Influence, Fraud, Misrepresentation, Mistake)

6. Lawful Consideration (Section 23)

7. Lawful Object (Section 23)

10. Possibility of Performance (Section 56)

11. Legal formalities

1. Void Contract [Section 2(j)]

2. Voidable Contract [Section 2(i)] valid

3. Illegal Contract [Section 23]

5. Unenforceable contract removed

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action ,#uct inferred eg Bus -

Unit 1b: Offer and Acceptance

According to Section 2(a) of The Mere expression of willingness

person signifies to another his

assent of the other, he is said to have

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1) Offer must be capable of creating legal

Social / Domestic ✗ 2. By Lapse of Offer= time

2) Offer must be communicated 3. By death/insanity of offeror or

(Case Law: Lalman Shukla v Gauri Dutt)

compliance of which amounts to acceptance

to offer ⑨ Case based As ) Govt Ban - =

definite Not definite

can be converted window

into contract (SCAN FOR VIDEO ON

(Case Law: Carlill v Carbolic Smokeball Co.)

5. Standing, open or continuing offer

6. Express Offer words

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the offer is made / auth person .

4. Silence cannot amount to acceptance

5. Acceptance must be in the mode specified

7. Acceptance must be given before lapse of offer

case based Cls .

Examples: we board bus .

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COMMUNICATION OF OFFER AND ACCEPTANCE [Section 3 to 6]

1. Communication of offer is complete when it comes to the knowledge of offeree.

2. Communication of acceptance is complete

As against Offeror As against Offeree

The offeror / proposer becomes bound by The acceptor is bound by the

CONTRACTS OVER TELEPHONE/TELEX/FAX/E-MAIL

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Section 2(d) of The Indian Contract

such an act or abstinence or promise is adq inadq

In simple words, consideration means

6) Consideration must not be something that the

7) Consideration must not be illegal, immoral or-

opposed to public policy