NAME KAMAL LOCHAN

ROLL NO. 2214101146

COURSE NAME LEGAL ASPECTS OF BUSINESS
COURSE CODE DMBA302
PROGRAM MBA
SEMESTER III

SET – 1

Answer - 1
The study of law encompasses much more than a mere understanding of legal rules. It extends to the
recognition and comprehension of the legal environment of business, which is crucial for aspiring legal
professionals. Knowledge of the legal environment provides a broader context within which legal rules
operate and enables a deeper understanding of the complexities and challenges faced by businesses.
Law and business are inherently intertwined. Businesses operate within a complex web of laws and
regulations that impact their operations, transactions, and decision-making processes. Understanding the
legal environment of business allows law students to appreciate the legal constraints, rights, and obligations
that businesses encounter. It provides them with a solid foundation to analyze and navigate legal issues that
arise in the context of commercial activities.
Furthermore, knowledge of the legal environment enables law students to anticipate and manage legal risks
effectively. In today's litigious society, businesses face numerous legal challenges that can significantly
impact their operations and reputation. By studying the legal environment of business, students develop the
skills to identify potential legal risks and develop strategies to mitigate them. This proactive approach allows
businesses to protect their interests and make informed decisions in a legally compliant manner.
Moreover, familiarity with the legal environment enhances a law student's ability to provide comprehensive
and effective legal counsel. Lawyers often serve as advisors to businesses, helping them navigate legal
complexities and ensure compliance with the law. By understanding the legal environment, law students can
offer valuable insights and guidance to businesses, assisting them in making informed decisions and
managing legal issues.

Additionally, the study of the legal environment of business contributes to a holistic understanding of the law
itself. It exposes students to the broader social, economic, and political factors that influence the development
and application of legal principles. This interdisciplinary approach enables law students to analyze legal issues
from multiple perspectives, consider the societal impact of legal decisions, and adapt legal principles to the
evolving needs of businesses and society.

Thus, the legal environment of a business is a major factor regulating the conduct of business.
Some laws facilitate conducting of business while other laws may be regulatory in nature. All
aspects of businesses are controlled by legal rules and regulations. The various facets of any
business need to be carried out according to the legal framework. If a business indulges in
illegal acts, it has to be punished in accordance with the law. In this manner, laws become
the foundation for regulation and conduct of business.

Answer - 2
Definition of contract of indemnity - Contracts for indemnity are discussed in Sections 124 and 125.
According to Section 124, an indemnity contract is one in which one party promises to protect the other
against a loss brought on to him or her (the promisee) by the promisor's own or another party's actions.

person. Such contracts include, for example, contracts for insurance. A contract of indemnification may
result from an express pledge or by operation of law, such as the obligation of a principal to hold an agent
harmless from the effects of any legitimate acts performed by them in their capacity as an agent.

In other words, we can say that a contract of indemnity is a binding legal arrangement between two
parties—the indemnifier and the indemnity holder—wherein one party guarantees to make good on any
losses or damages the other could suffer as a result of particular occurrences or situations. This agreement's
main goal is to protect the indemnity holder financially while shifting the risk of possible losses to the
indemnifier.

Rights of the Indemnifier: The rights of the indemnifier are not mentioned in the Act. The rights of the
indemnifier, however, are comparable to those of a surety under Section 141, in that the person is entitled to
the benefits of all the security that the creditor has against the principal debtor, whether or not he or she was
aware of them.
Right to Information - The indemnifier has the right to know about any risks or circumstances that could
result in a claim under the indemnity contract. This allows them to take necessary precautions or mitigate the
risks involved.
Right to Take Over Legal Proceedings - In some circumstances, the indemnifier has the right to take over
any legal actions associated with the claim. They can make decisions regarding settlement, defense
strategies, or negotiation tactics.
Right to Recover Damages - The indemnifier has the right to recoup the money it paid to the indemnity
holder if the latter receives payment from a third party for a loss or injury covered by the contract of
indemnity.

Rights of the Indemnity holder: The indemnity holder is entitled to recover from the promisor:
• All damages that he or she may be required to pay in any lawsuit pertaining to matters to which the
promise to indemnify applies;
• All costs of legal proceedings that he or she may have to pay to the third party, provided that.
The person either acted under the authority of the indemnifier or if he or she has acted in such a way as a
prudent person would act in his or her own case; Any amounts that may have been paid in accordance with
the terms of any settlement reached in connection with such a lawsuit, provided that the settlement was
reasonable and not against the indemnifier's instructions.

Answer – 3
What is a partnership? - The Indian Partnership Act, 1932 defines a partnership as "the relation between
persons who have agreed to share the profits of a business carried on by all or any of them acting for all".
A partnership is a type of business arrangement in which two or more people or organisations join together
with the common objective of running a business and splitting its gains and losses. It is a recognised
corporate entity in which partners pool their resources, abilities, and knowledge to carry out commercial
operations. In a partnership, the partners often combine their capital, assets, and financial resources to
launch and run the business. They also contribute labour, knowledge, skills, and experience to the
partnership's success.

The Act also lays down certain special features of a partnership, on the basis of which its existence can be
determined. These features are:

• An agreement between two or more people is required: This understanding may be expressed or
implied. Although a written agreement is not required, it is suggested in order to prevent
disagreements.
• It must be an agreement to operate a business: As a result, the partners must be involved in some
kind of commercial endeavour. It need not be a profitable endeavour, but it must be one that is
 pursued with the goal of turning a profit.
• All of the partners, or any one of them acting on their behalf, must conduct business. The ability to
act on behalf of the partnership rests with each partner, according to this. The doctrine of mutual
agency is this.
• The business's profits must be divided among the partners. It does not follow that they must
distribute the profits evenly. Different profit-sharing ratios may be mentioned in the agreement.
• To form a partnership, the parties must share this objective. This implies that they must have the
intention of entering into a legal relationship. This intention can be deduced from the agreement's
clauses or the parties' actions.

• Partners jointly own and manage the company under the terms of joint ownership and control. They
have a voice in the partnership's management, operations, and decision-making.

• Partners in a general partnership are personally liable indefinitely for the debts and obligations of the
firm. Liabilities of the partnership may be satisfied out of their own assets.

• Transfer Restrictions: A partner may not transfer his or her partnership interest to a third party
without the approval of the other partners. This guarantees the partnership's continuance and
stability.

Together, these unique characteristics help determine whether a partnership is recognised as such under the
Indian Partnership Act. For comprehensive information and a precise interpretation, it's important to speak
with legal counsel or to the relevant Partnership Act provisions.

SET – 2

Answer – 4
Negotiable instruments: Written agreements that guarantee the payment of a certain sum of money and
offer a way for the transfer of rights from one party to another are referred to as "negotiable instruments."
These instruments are commonly used in business transactions as a means of payment or as a way to
establish legally binding financial commitments.
Negotiable instruments make business transactions more convenient, secure, and effective by allowing
parties to transfer financial responsibilities with ease. It's crucial to keep in mind that the laws governing
negotiable instruments can change between different countries, and certain conditions must be met in order
for the instruments to be legitimate and enforceable.

Types of Negotiable instruments recognized by the Negotiable Instrument Act,1881:

• Promissory Notes: A promissory note is a written document in which the maker (the maker) makes a
promise to the recipient (the payee) to pay a certain amount of money at a predetermined time or
upon demand.

• Bills of Exchange: A bill of exchange is a written document that provides an unconditional command
from one party, known as the drawer, to another, known as the drawee, to pay a set amount of money
to a third party, known as the payee, either on a specific date or upon demand.

• Cheques: A cheque is a bill of exchange drawn on a bank that is cashable immediately. It is a tool
used to transfer funds from a bank account in which the account holder (the drawer) instructs the
bank (the drawee) to transfer a certain sum of money to the person or organisation indicated on the
 cheque (the payee).

• A certificate of deposit (CD) is a negotiable document that a bank or other financial institution issues
to recognise the deposit of money for a certain time period. The issuer promises to refund the
deposited amount plus interest at maturity, making it a time deposit.

• Government Securities: Treasury bills, bonds, and debentures are examples of government securities
that can be traded. Governments issue these with the promise to repay the principal and interest when
investors lend them money.

• It's significant to remember that each kind of negotiable instrument has unique traits, regulations, and
legal prerequisites for validity and enforceability. The Negotiable Instruments Act outlines
procedures for negotiating, transferring, and discharging these documents as well as the parties'
rights and obligations.For thorough information and a precise understanding of the kinds of
negotiable instruments recognised under the pertinent laws, it is advised to examine the specific
requirements of the applicable jurisdiction's legislation or seek legal counsel.

Answer – 5
The Consumer Protection Act, 2019 (CPA) is a comprehensive piece of legislation that attempts to
safeguard Indian consumers' interests. The Act became effective on July 20, 2020.

The CPA has several key features, including:

• CCPA (Central Consumer Protection Authority) establishment. The CCPA is a statutory organisation
tasked with advancing, defending, and upholding consumers' rights. The CCPA will have the
authority to look into and bring legal action in instances of deceptive advertising, unfair business
practises, and consumer rights violations.
• Increased fines for transgressions. Penalties for violating consumer rights have been raised by the CPA.
As an illustration, the fine for deceptive or false advertising has raised from Rs. 10,000 to Rs. 10 lakh.
• Quicker resolution of disputes. To speed up the resolution of consumer disputes, the CPA has
established a number of steps. For instance, the State Consumer Dispute Redressal Commission
(SCDRC) and the District Consumer Dispute Redressal Commission (DDRC) would now be expected
to resolve disputes within 150 days and 90 days, respectively.
• More informed consumers. A number of measures in the CPA are intended to raise consumer
awareness. The CCPA will be expected, for instance, to develop a website and produce a quarterly
magazine to distribute information regarding consumer rights and obligations.
• Consumer rights. The Consumer Protection Act (CPA) outlines six consumer rights, including the
rights to information, choice, hearing, redress, consumer education, and a healthy environment.
• Make up of the CCPA. A Chairperson who is chosen by the federal government will lead the CCPA.
The CCPA will also have other officers, including a Director-General.
• CCPA's authority. Wide-ranging authority will be granted to the CCPA, including the ability to look
into, pursue, and punish infringement of consumer rights.
• Method for making grievances. You can register complaints with the CCPA, DDRC, or SCDRC. The
National Consumer Dispute Redressal Commission (NCDRC) will have jurisdiction over complaints
where the value of the goods or services is more than Rs. 10 crore. The DDRC will have jurisdiction
over complaints where the value of the goods or services is less than Rs. 1 crore, the SCDRC will have
jurisdiction over complaints where the value of the goods or services is between Rs. 1 crore and Rs.
10 crore.
• Consumers have access to remedies. When their rights are violated, consumers have a range of options
for redress, including monetary compensation, refunds, replacement products or services, and a sales
restriction.
 The CPA is a thorough and forward-thinking piece of law that will aid in defending the interests of Indian
consumers. On the Indian consumer market, the Act is anticipated to have a significant impact and to
contribute to the development of a more consumer-friendly environment.

Answer – 6
An important piece of law, the Right to Information Act (RTI Act), was passed in 2005 and gives citizens
access to information that is kept by public entities. The act intends to encourage involvement in government,
accountability, and openness. Citizens have access to a number of rights under the RTI Act that make it easier
for them to interact with public authorities and improve their power to hold them responsible.

The rights that citizens have access to under the RTI Act of 2005 are explained in great detail here:

• Right to Information Request: The RTI Act gives people the freedom to ask any public authority for
information. This comprises government agencies, offices, undertakings in the public sector, and any
other entity that the government controls or finances heavily. The concerned public authority will
accept written requests for information from citizens.
• Right to Receive Information: Individuals have the right to a prompt response to their requests for
information. In accordance with the law, the public body must respond to the request for information
within 30 days of receiving it. Information must be given in a timely manner, no later than 48 hours,
in extraordinary situations concerning a person's life or freedom.
• Right to Access Government Records: The RTI Act gives citizens access to any information held by
public bodies, including records, papers, files, reports, and other materials. This covers both analogue
and digital records. To safeguard sensitive information including trade secrets, national security, and
individual privacy, the statute does offer some exclusions.
• Right to Appeal: A citizen has the right to appeal if their request for information is turned down, only
partially answered, or not addressed in a timely manner. The First Appellate Authority and the
Central/State Information Commission are the two levels of appellate authorities established by the
RTI Act. Within 30 days of the decision or lack of response, citizens may file an appeal with the First
Appellate Authority. Additionally, they may file an appeal with the Information Commission within
90 days after the First Appellate Authority's decision.
• Right to Inspection: Public authorities are required to allow citizens to see government records. They
can go at the documents in person, make notes or extracts, or get certified copies of the records. The
law permits people to use their own cameras to take pictures of the documents. However, in order to
provide copies of the requested material, the public body may charge a reasonable cost.

The RTI Act, 2005 offers people a solid foundation to exercise their right to information and engage in
democratic activity. It encourages transparency in government, establishes a culture of open and responsible
administration, and gives people the capacity to demand accountability from public authorities.