Business Laws

MMS : Semester I Session 1 & 2

Marks Distribution

Viva 10Marks k

Term Exam 50Marks k

Project& Presentation 40Marks

Presentation
40 marks for each presentation 4 students in each group Each group is suppose to make a One pager / handout about the p presentation and give out the same to the class before the g presentation starts Project will be on Re-do basis, if project / presentation is not up to the mark, ZERO marks will be give , g Each presentation should be of 30 minutes

Indian Contract Act 1872 Act,

Topic 1

Agreement & Contract

Agreement Every promise and every set of promises, forming the consideration for each other Contract An agreement enforceable by law

Essentials of a valid contact u/s 10

All agreements are contracts if they are made by the free consent of parties competent to contract, f a l f l consideration and for lawful id ti d with a lawful object, and are not hereby expressly declared to be void.

Competency to Contract u/s 11

Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is sound mind and is not disqualified from contracting by any law to which he is subject. Age of majority 18 years (21 years where there is a court custodian)

Free Consent u/s 14

Consent is said to be free when it is not caused by : coercion, as defined in section 15, or undue influence, as defined in section 16, or f fraud, as d fi d i section 17 or d defined in ti 17, misrepresentation, as defined in section 18, or mistake, subject to the provisions of section 20,21, and 22.

Coercion
Coercion" is the committing, or threatening to commit : any act forbidden by the Indian Penal Code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. It is immaterial whether the Indian Penal Code is or is not in force in the place where the coercion is employed.

Undue Influence
A contract is said to be induced by undue influence where the relations subsisting between the parties are such that : p p one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the p g other.

Fraud
"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto of his agent, or to induce him to enter into the contract: the suggestion, as a fact, of that which is not true, by one who does not believe it to be true ; the active concealment of a fact by one having knowledge or belief of the fact ; a promise made without any intention of performing it any other act fitted to deceive; any such act or omission as the law specially declares to be fraudulent.

Misrepresentation
Misrepresentation, means and includes : the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, p g , , though he believes it to be true any breach, of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice or to the p j prejudice of any one claiming under him; y g causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.

Illustrations
A, intending to deceive B, falsely represents that five hundred tons of indigo are made annually at A's factory, and thereby induces B to buy the factory. The contract is voidable at the option of B. A fraudulently informs B that A's estate is free from incumbrance. B thereupon buys the estate. The estate is subject to a mortgage. B may either avoid the contract, or may insist on its being carried out and the mortgage debt redeemed. g p B, having discovered a vein of ore on the estate of A, adopts means to conceal, and does conceal, the existence of the ore from A. Through A's ignorance B is enabled to buy the estate at an undervalue. The contract is voidable at the option of A.

Void Agreements
A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain, the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of the facts. The agreement is id i void. A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void. A, being entitled to an estate for the life of B, agrees to sell it to C. B was dead at the time of the agreement, but both parties were ignorant of the fact. The agreement is void.

Consideration
When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or d does or abstains f b t i from d i doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise p

Illustration
A agrees to sell his house to B for 10,000 rupees. Here Bs promise to pay the sum of 10,000 rupees is the consideration for As promise to sell the house, and A's promise to sell the house is the consideration for B's promise to pay the 10,000 rupees. These are lawful considerations. id ti A promises to pay B 1,000 rupees at the end of six months, if C, who owes that sum to B, fails to pay it. B promises to grant time to C accordingly. Here the promise-of each party is the consideration for the promise of the other party and they are lawful considerations. A promises, for a certain sum paid to him by B, to make good to B the value of his ship if it is wrecked on a certain voyage. Here A's promise is the consideration for B's payment and B's payment is the consideration for A's promise and these are lawful considerations.

Void Agreements
Agreement void, if considerations and objects unlawful in part. If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void. A promises to superintend, on behalf of B, a legal manufacture of indigo, and an illegal traffic in other articles. B promises to pay to A a salary of 10,000 rupees a year. The agreement is void, the object of A's promise, and the consideration for B's promise, being in part unlawful.

Illustration
A promises, for no consideration, to give to B Rs. 1,000. This is a void agreement. , , p g , , A, for natural love and affection, promises to give his son, B, Rs. 1,000. A puts his promise to B into writing and registers it. This is a contract. A finds B's purse and gives it to him. B promises to give A Rs. 50. This is a contract. A supports B's infant son. B promises to pay A's expenses in so doing. This is a contract. A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs. 500 on account of the debt. This is a contract contract.

Illustrations
A agrees to sell a horse worth Rs. 1,000 for Rs. 10. As consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration. A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A denies that his consent to the agreement was freely given. The inadequacy of the consideration is a fact which the Court should take into account in considering whether or not A's consent was freely given.

Void Agreements
Agreement in Restrain of Trade Agreement in Restrain of Marriage Agreement in Restrain of Legal Proceedings Agreement b way of W A t by f Wager

Contingent Contract
A "contingent contract" is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. p y , A contracts to pay B Rs. 10,000 if B's house is burnt. This is a contingent contract. Enforcement of contracts contingent on an event happening happening. Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened. pp If the event becomes impossible, such contracts become void.

Illustration
A makes a contract with B to buy B's horse if A survives C. This contract cannot be enforced by law unless and until C dies in As lifetime. A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse has been offered, refuses to buy him. The contract cannot be enforced by law unless and until C refuses to buy the horse. p y y A contracts to pay B a sum of money when B marries C. C dies without being married to B. The contract becomes void.

Contingent Contracts
Enforcement of contracts contingent on an event not happening. Contingent contracts to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible, and not before. A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.

Contingent Contracts
Agreement contingent on impossible events void. Contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made. A agrees to pay B 1,000 rupees if two straight lines should enclose a space. The agreement is void. A agrees to pay B 1,000 rupees if B will marry A's daughter C. C was dead at the time of the agreement. The agreement is void. g g

Performance of Contract
A, B and C jointly promise to pay D 3,000 rupees. D may compel either A or B or C to pay him 3,000 rupees. , j yp p y , p A, B and C jointly promise to pay D the sum of 3,000 rupees. C is compelled to pay the whole. A is insolvent, but his assets are sufficient to pay one-half of his debts. C is entitled to receive 500 rupees from A's estate, and 1,250 rupees from B. A, B and C are under a joint promise to pay D 3,000 rupees. C is unable to pay anything, and A is compelled to pay the whole. A is p y y g p p y entitled to receive 1,500 rupees from B. A, B and C are under a joint promise to pay D 3,000 rupees, A and B being only sureties for C. C fails to pay. A and B are compelled to pay the whole sum. They are entitled to recover it from C.

Time of Performance
A promises to deliver goods at B's warehouse on the first January. On that day A brings the goods to B's warehouse, but after the usual hour for closing it, and they are not received. A has not performed his promise. Time and place for performance of promise, where time is specified and no application to be made. When promise is to be performed on a certain day, and the promisor has undertaken to perform it without application by the promisee, the promisor may perform it at any time during the usual hours of business on such day and at the place at which th promise ought t b performed. l t hi h the i ht to be f d

Performance of Contract
Performance in manner or at time prescribed or sanctioned by promisee. The performance of any promise may be made in any manner, or at any time which the promisee prescribes or sanctions. B owes A 2,000 rupees. A desires B to pay the amount to As account with C, a banker. B, who also banks with C, orders the amount to be transferred from his account to A's credit, and this is done by C. Afterwards, and before A knows of the transfer, C fails. There has been a good payment by B. A and B are mutually indebted. A and B settle an account by setting off one item against another, and B pays A the balance found to be due from him

Novation, Rescission, & Alteration of Contract

Effect of novation, rescission, and alteration of contract. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. A owes money to B under a contract. It is agreed between A, B and C that B shall thenceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a new debt from C to B has been contracted. p g A owes B 10,000 rupees. A enters into an arrangement with B, and gives B a mortgage of his (A's) estate for 5,000 rupees in place of the debt of 10,000 rupees. This is a new contract and extinguishes the old.

Consequences of rescission of voidable contract

When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he have received any benefit thereunder from another party to t such contract, restore such b h t t t h benefit, so f as may b t th person fit far be, to the from whom it was received A pays B 1,000 rupees in consideration of B's promising to marry C, A's daughter. C is dead at the time of the promise. The agreement is void, but B must repay A the 1,000 rupees. A contracts to sing for B at a concert for 1,000 rupees, which are paid in advance. A is too ill to sing. A is not bound to make compensation, to B for the loss of the profits which B would have made if A had been able to sing, but must refund to B the 1,000 rupees paid in advance.

Contract for Necessities

Claim for necessaries supplied to person incapable of contracting, or on his account. If a person, incapable of entering into a contract, or any one whom he is legally bound to support, is supplied by another, person with necessaries suited to his condition in life, the person who h f h has furnished such supplies i entitled t b reimbursed i h d h li is titl d to be i b d from the property of such incapable person A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B's property. A supplies the wife and children of B, a lunatic, with necessaries suitable to their condition in life. A is entitled to be reimbursed from B's property.

Responsibility of finder of goods

Responsibility of finder of goods.-A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.

Illustration :
A and B jointly owe 100 rupees to C. A alone pays the amount to C, and B, not knowing this fact, pays 100 rupees over again to C. C is bound to repay the amount to B b d h B.

Breach of Contact
Compensation for loss or damage caused by breach of contract. When Wh a contract h b t t has been b k broken, th party who suffers b such the t h ff by h breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract. When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.

Illustration
A contracts to sell and deliver 50 Kgs of wheat to B, at a certain price to be paid on delivery. A breaks his promise. B is entitled to receive from A, by way of compensation, the sum, if any, by which the contract price falls short of the price for which B might have obtained 50 k of wheat of lik quality at th ti bt i d kgs f h t f like lit t the time when th wheat h the h t ought to have been delivered. A hires B's ship to go to Bombay, and there take on board, on the first of January, a cargo which A is to provide and to bring it to Calcutta, the freight to be paid when earned. B's ship does not go to Bombay, b t A h opportunities of procuring suitable conveyance B b but has t iti f i it bl for the cargo upon terms as advantageous as those on which he had chartered the ship. A avails himself of those opportunities, but is put to trouble and expense in doing so A is entitled to receive so. compensation from B in respect of such trouble and expense.

Illustration
A sells certain merchandise to B, warranting it to be of a particular quality, and B, in reliance upon this warranty, sells it to C with a similar warranty. The goods prove to be not according to the warranty, and B becomes liable to pay C a sum of money by way of compensation. B i entitled t b reimbursed thi sum b A ti is titl d to be i b d this by A.

Breach of Contract
Compensation for breach of contract where penalty stipulated for : When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the p , contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. A contracts with B to pay B Rs. 1,000, if he fails to pay B Rs. 500 on a given day. A fails to pay B Rs. 500 on that day. B is entitled to recover from A such compensation, not exceeding Rs. 1,000 as the Court considers reasonable.

Illustration
A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights every week during the next two months, and B engages to pay her 100 rupees for each nights performance. On the sixth night, A wilfully absents herself from the theatre, and B, in consequence, rescinds th contract. B i entitled t claim i d the t t is titl d to l i compensation for the damage which he has sustained through the non-fulfilment of the contract.

Indemnity
"Contract of indemnity is a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person. A contracts to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of 200 rupees. This is a contract of indemnity.

Right of Indemnity Holder

The promisee in a contract of indemnity, acting within the scope of his authority, is entitled to recover from the promisor : all damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies all costs which he may be compelled to pay in any such suit if, in bringing or defending it, he did not contravene the orders of the promisor, and acted as it would have been prudent for him to act in the absence of any contract of indemnity, or if the promisor authorized him to bring or defend the suit ; all sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor, and was one which it would have been prudent for the promisee to make in the absence of any contract of i d b f t t f indemnity, or if th promisor it the i authorized him to compromise the suit.

Contract of Guarantee
Contract of guarantee " is a contract to perform the promise, or discharge the liability, of a third person in case of his default. p g g y ; The person who gives the guarantee is called the " surety; the person in respect of whose default the guarantee is given is called the " principal debtor ", and the person to whom the guarantee is given is called the " creditor ". A guarantee may be either oral or written. y g y p Anything done, or any promise made, for the benefit of the principal debtor, may be a sufficient consideration to the surety for giving the guarantee.

Illustrations
B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of the price of the goods. C promises to guarantee the payment in consideration of A's promise to deliver the goods. This is a sufficient consideration for C's C' promise. i A sells and delivers goods to B. C afterwards, without consideration, agrees to pay for them in default of B. The agreement is void.

Suretys Liability
The liability of the surety is coextensive with that of the principal debtor, unless it is otherwise provided by the contract. g p y g y , A guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonored by C. A is liable not only for the amount of the bill but also for any interest and charges which may have become due on it.

Continuing guarantee
A guarantee which extends to a series of transactions is called a continuing guarantee ti i t A guarantees payment to B of the price of five sacks of flour to be delivered b B t C and t b paid f i a month. B d li d li d by to d to be id for in th delivers fi five sacks to C. C pays for them. Afterwards B delivers four sacks to C, which C does riot pay for. The guarantee given by A was not a gg , gy p continuing guarantee, and accordingly he is not liable for the price of the four sacks. A becomes surety to C for B's conduct as a manager in Cs bank. y g Afterwards B and C contract, without A's consent, that Bs salary shall be raised, and that he shall become liable for one-fourth of the losses on overdrafts. B allows a customer to overdraw, and the bank loses a sum of money A is discharged from his suretyship by the money. variance made without his consent, and is not liable to make good this loss.

Bailment
A " bailment " is the delivery of goods by one person to another for some purpose, upon a contract th t th shall, when th purpose i t t that they h ll h the is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the g goods is called the bailor. The person to whom they are delivered is p y called, the bailee. A lends a horse, which he knows to be vicious, to B. He does not disclose th f t th t th h di l the fact that the horse i vicious. Th h is i i The horse runs away. B i is thrown and injured. A is responsible to B for damage sustained. A hires a carriage of B The carriage is unsafe though B is not aware of B. unsafe, it, and A is injured. B is responsible to A for the injury. A bails 100 bales of cotton marked with a particular mark to B. B, p without A's consent, mixes the 100 bales with other bales of his own, bearing a different mark : A is entitled to have his 100 bales returned, and B is bound to bear all the expense incurred in the separation of the bales, and any other incidental damage.

Pledge
The bailment of goods as security for payment of a debt or performance of a promise is called " pledge ". p , The bailor is in this case called the pawnor , the bailee is called the pawnee. The pawnee may retain the goods pledged, not only for payment of the debt or the performance of the promise, but for the interest of the debt, and all necessary expenses incurred by him in respect of the possession or for the preservation of the goods pledged. p p g p g

Agency
An "agent" is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the " principal. No consideration is necessary to create an agency A directs B, his solicitor, to sell his estate by auction, and to employ an auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. C is not a sub-agent, but is A's agent for the conduct of the g g sale.

Business Laws
MMS : Semester I Session 3

Sale of Goods Act

Topic - 2

Goods
Goods" means every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale

Key Terms
immoveable property does not include standing timber, growing crops or grass y p y g yg ; buyer means a person who buys or agrees to buy goods; seller means a person who sells or agrees to sell goods price means the money consideration for a sale of goods delivery means voluntary transfer of possession from one person to another specific goods means goods identified and agreed upon at the time a contract of sale is made

Definitions outside Sale of Goods Act

Actionable Claim is a plain unsecured debt which can be claimed by a person against another person and which can be enforced in civil courts according to law. An Actionable Claim is transferable and inheritable and it is deemed to be a property in the hands of the person who h th claim. (TOP Act) h has the l i "Immovable property" shall include land, benefits to arise out of land, d things attached t th earth, or permanently f t l d and thi tt h d to the th tl fastened t d to anything attached to the earth (General Clauses Act)

Sale & Agreement to Sell

A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. y A contract of sale may be absolute or conditional. Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale sale. where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled the fulfilled, contract is called an agreement to sell. An A agreement t sell b t to ll becomes a sale when th ti l h the time elapses or th l the conditions are fulfilled subject to which the property in the goods is to be transferred.

Illustration
X agrees to sell and Y agrees to buy 100 Kg of Rice for Rs. 10,000. X pays Y Rs. 10,000 and Y delivers 100 Kg of Rice, this is a Sale Contract A agrees to buys shares of XYZ Ltd from B if the market price of shares of XYZ Ltd falls from Rs. 10 to Rs. 5. There is agreement to sale. Upon the market price of shares of XYZ Ltd getting to Rs. 5, the agreement to sale converts to Sale

Formalities of Contract
A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. yp y g The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by installments, or that the delivery or payment or both shall be postponed. Subject to the provisions of any law for the time being in force, a contract of sale may be made in writing or by word of mouth, or y g y partly in writing and partly by word of mouth or may be implied from the conduct of the parties.

Perishable Goods
Where there is a contract for the sale of specific goods, the contract is void if the goods without the knowledge of the seller have, at the time when the contract was made, perished or become so damaged as no longer to answer to their description in the contract.

Price
The price in a contract of sale may be fixed by the contract or may be left to be fixed in a agreed manner or may be determined by the course of dealing between the parties. Where the price is not determined, as above, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case.

Sell at valuation
Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party cannot or does not make such valuation, the agreement is thereby avoided; If the goods or any part thereof have been delivered to, and appropriated by, the buyer, he shall pay a reasonable price there for. Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain a y p y y suit for damages against the party in fault.

Conditions & Warranties

A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. p A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. Whether a stipulation a condition or a warranty depends in each case on the construction of the contract. A stipulation may b a condition, th ti l ti be diti though called a warranty i th h ll d t in the contract.

When condition to be treated as warranty

Where the buyer may waive the condition; he cannot insist on its fulfillment. (Where is accepts defective goods) A buys a Car from B. The car is delivered without a engine and A y f g accepts delivery of the car. Here A has waves the condition Where buyer treats breach of any condition as a breach of warranty warranty. (Where he claims damages instead of repudiating the contract) A buys a Car from B The car is delivered without a engine and A B. accepts delivery of the car and claims damages from B for cost of engine. Here A treats breach of condition as breach of warranty

Express Conditions & Warranties

Where the buyer expressly specifies the good that he wants to buy, it is called Express Condition / warranty , , y A informs B, the seller, that he intends to buy a Motor Car Honda City Vxi model Silver Color. This is called express condition. X informs Y, a builder, that we wants a Sea Facing apartment on 2nd floor of building # 2, this is express condition

Implied Conditions
Implied Condition as to Title Seller has right to sell goods Or will have right to sell the goods at the time when the property is to pass

Sale by Description

Goods supplied to be same as sample Good shall correspond with description

Sale by Sample

Goods must correspond with sample q p p quality y Buyer must be given reasonable time to correspond with bulk Goods must be free from defect

Implied Conditions
Sale by Sample & Description Goods must correspond with sample quality and description

Condition as to Merchantable Quality

The quality and condition of g q y goods must be such that a man of ordinary prudence would accept them as goods of that description Goods must be free from latent / hidden defects

Condition as to Wholesomeness

Only in case of eatables / provisions / food Goods shall be fit for human consumption

Caveat Emptor
Caveat Emptor is let buyer be aware. Buyer must satisfy himself about the quality B i f hi lf b h li as well the suitability of the goods

Caveat Emptor - exceptions

Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and that the buyer relies on the seller's skill or judgment, there is an implied condition that the goods shall be reasonably fit for such purpose Where goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality Where seller makes a misrepresentation and buyer relies of the representation Where seller knowing conceals a defect which would not have discovered on reasonable examination Where goods are sold by description/sample and the goods supplied by seller do no correspond to the description / sample

Transfer of property
Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed
goods are said to be in a "delivered state" when they are in such state that the buyer would under the contract be bound to take delivery of them Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof thereof.

Transfer of property
Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thi i d h t thing is done and th b d the buyer h notice th has ti thereof. f Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the th assent of th seller, th property i th goods th t f the ll the t in the d thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made.

Reservation of right of disposal

Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, the property in the goods does not pass to the buyer until th conditions i b til the diti imposed b th seller are f lfill d d by the ll fulfilled.

Risk prima facie passes with property

The goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer's risk whether delivery has been made or not. Exceptions : Where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault

Seller or buyer in possession after sale

Where a person, having sold goods continues or is in possession of the goods or of the documents of title to the goods : the delivery or transfer by that person, to any person receiving the same in good faith and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the same. A sells 50 kg of wheat to B, however A still hold possession of the 50 kg sack of wheat and B has not taken possession of the same. C g p approaches A for 50 kg of wheat and A sells the same sack of wheat set aside for delivery to B, to C. C did not have knowledge of the contract of sale between A & B, and takes possession of the sack of wheat. Here it will be treated as if A was acting on Bs behalf to sell the 50 kg of wheat to C

Sale by non-owner non owner

Namo dat quod non habet ~ no one can give what he does not himself possess

The rule
Where goods are sold by a person who is not the owner of them and who sell them without any authority or consent of the owner, the buyer acquires no better title to the goods than the seller had unless the owner of the goods is by his conduct disallowed from g y denying the seller's authority to sell X stole a TV and delivered it to Y, an auctioneer Y sold the TV to Z auctioneer. at auction. Here Z obtained no title to the TV because X had no title to it.

Exception to Rule
Sale by Mercantile Agent
Agent much be in possession of good, with the Agent consent of the owner The Agent must have sold good in ordinary course of business and buyer must have acted in good faith Buyer must not have knowledge of that the seller does y g not have authority

Sale by Joint Owner

Joint owner must have sole possession of goods with Joint consent of co-owner Buyer must have acted in good faith Buyer must not have knowledge of that the seller does not have authority y

Sale by S l b person in i possession under voidable contract

Seller must have possession of goods under a voidable g contract on grounds of coercion, undue influence, misrepresentation or fraud Good must have to be sold before the contract is rescinded Buyer must have acted in good faith without knowledge of sellers defect in title sellers

Exception to Rule
Seller in possessions after sale - Seller should be in p f possession of goods as seller and not bailee. Buyer must buy in good faith, without knowledge of pervious sale

Sale by finder of lost goods The owner could not be found or if found, refuses to pay lawful charges or if goods are perishable in nature

Sale by unpaid Seller Exercise right of lien or stoppage in transit

Delivery
Delivery means the voluntary transfer of possession from one person to another y Mode of delivery By doing anything which the parties agrees shall be treated as delivery By doing anything which has the effect of putting the goods into the buyers possession

Mode of Delivery

Actual Delivery
Where goods are physically handed over to the buyer

Symbolic Delivery
Where some symbol of real possession or control is handed over to buyer E.g. Home keys / Car keys C k

Constructive Delivery
Where person in possession of goods goods, acknowledges to hold goods on behalf of the buyer

Unpaid Seller
When the whole of the price has not been paid or tendered; or when a negotiable instrument has been received as conditional payment and the payment, same is dishonored

Right of unpaid seller

A lien on the goods for the price while he is in possession of them; In case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them; p p ; Right of re-sale Where the property in goods has not passed to the buyer, the unpaid seller has a right of withholding delivery and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer.

Seller's lien
The unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment of the price in the following cases where the goods have been sold without any agreement on credit where the goods have been sold on credit, but the term of credit has expired where the buyer becomes insolvent

Suit for price

Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods. Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract. Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for nonacceptance

Specific performance
In any suit for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of d d t f damages. The decree may be unconditional, or upon such terms and conditions as to damages, payment of the price or otherwise, as the court may deem just, and the application of the plaintiff may be made at any time before the decree.

Auction Sale
where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of a separate contract of sale; h b f f l the sale is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner; and, until such announcement is made any bidder may retract his bid; made, a right to bid may be reserved expressly by or on behalf of the seller and, where such right is expressly so reserved, but not otherwise, the seller or any one person on his behalf may, subject to the provisions hereinafter y p y j p contained, bid at the auction; where the sale is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any person t bid at such sale, or f th auctioneer k to t h l for the ti knowingly t t k any bid i l to take from the seller or any such person; and any sale contravening this rule may be treated as fraudulent by the buyer; the sale may be notified to be subject to a reserved or upset price; if the seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the buyer.

Constitution of India
Certain key aspects of the Indian Constitution that we should be aware of

Preamble
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens: JUSTICE, social, economic and political; LIBERTY of thought, expression, belief, faith and worship; EQUALITY of status and of opportunity; and to promote among them all; FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation; IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY ADOPT, ENACT AND G O C GIVE TO O O OURSELVES THIS CO S S S S CONSTITUTION. O

Meaning
sovereign means supreme or independent. India is internally and externally sovereign - externally f ll free f from the control of any f h l f foreign power and d internally, it has a free government which is directly elected by the people and makes laws that govern the people Socialist means the absence of discrimination on the grounds only of caste, color, creed, sex, religion, or language. Under social equality all are equal q pp before law and has equal status and opportunities Secular implies separation of state and religion. It means the state will make laws without regards to any religion. India, therefore does not have an official state religion. Every person has the right to preach, practice and propagate any religion they choose. The government must not favor or discriminate against any religion. It must treat all religions equally. All citizens, citizens irrespective of their religious beliefs are equal in the eyes of law

Meaning
Democracy means citizens elect their governments at all levels

(Union, State and local) by a system of universal adult franchise; popularly known as 'One man one vote'. Every citizen, who is 18 years of age and above and not otherwise debarred by law, is entitled t vote. E titl d to t Every citizen enjoys thi right without any iti j this i ht ith t discrimination on the basis of caste, creed, color, sex, religion or education
Republic democratic republic is an entity in which the head of state is

elected, directly or indirectly, for a fixed tenure. The President of India is l t d by I di i elected b an electoral college f a t l t l ll for term of fi years. Th f five The Post of the President Of India is not hereditary. Every citizen of India is eligible to become the President of the country

Six Fundamental Rights

Right to equality * Right to freedom * Right against exploitation Right to freedom f li i Ri ht t f d of religion Cultural and educational rights Right to constitutional remedies

Right of Equality
Equality Before Law - All citizens enjoy equality before law. All enjoy equal protection of law. Equality before law however does not mean absolute equality or equality is among the unequal law, however, unequal. It means equality or equality among the unequal. It means equality among the similarly placed people. It does not prohibit the classification of persons into different groups. Prohibition of discrimination - It prohibits discrimination on grounds of religion, race, caste, sex or place of birth. No person can, on any of any of these grounds, be denied access to shops, hotels, public restaurants and places of public entertainment or the use of wells, tanks, bathing Ghats, and places of public resort. Equality of Opportunity - this right provides equality of opportunity for all citizens in mattes relating to employment or appointment to any office the state. However, qualifications can be fixed for various jobs. Abolition of Untouchables - For eradicating the evil practice of untouchables in India, the Constitution has abolished untouchable. Practice of untouchable in any form is an offence publishable by law. All citizens of India now enjoy equal status. Abolition of Titl - Th C Ab liti f Titles The Constitution prohibits th state f tit ti hibit the t t from conferring any titl on citizens. f i title iti However honors for military or academic distinctions can be given. This right does not prevent the grant of military decorations such as Parma Vir Chakra, Mahavir Chakra. Vir Chakra and Ashok Chakra.

Right of Freedom
Fundamental Freedoms of Citizens - All citizens have the right to: (i) Freedom of speech and expression. expression (ii) Freedom of assembly (iii) Freedom to form associations (iv) Freedom of associations. movement (v) Freedom to reside and settle (VI) Freedom of profession, occupation, trade or business. The Right to Freedom - like the right to equality is also not absolute. It is also subject to reasonable limitations. These freedoms have to be used without any violation of public order, public health, morality and security of state. Further, in respect of freedom of profession, trade, and business, the state can prescribe professional or technical qualifications. The State can also nationalize any industry or business. Protection against Arbitrary conviction - No person can be punished except for a violation of law. No person can be subjected to a punishment greater than the one prescribed by law. For one crime one punishment can be given. No person accused of any offence can be forced to give evidence against him him. Protection of Life and Liberty - It grants protection to the life and liberty of citizens as well as non-citizens. It says, No person can be deprive of his life and liberty except according to the procedure established by law law. Protection against Arrest and Detention - The Constitution also provides protection against arbitrary arrest and detention. Any person arrested by the police enjoys certain protections. He has a right to be informed about the grounds of his arrest. He has the right to consult his lawyer. g g g y He is to be produced before the nearest magistrate within a period of 24 hours of his arrest

Fundamental Duties
To respect and incorporate the ideals which were the very base of our national struggle for freedom f f d To follow the Constitution and respect its institutions, the National Flag and the National Anthem To spread the message of peace and brotherhood amongst all the Indian citizens irrespective of linguistic, religious and regional or sectional diversities To discontinue practices pertaining to the impairment of the dignity of women To protect and promote the sovereignty, unity and integrity of India To protect public property and to avoid violence To respect and preserve the rich heritage of Indian culture To contribute towards making improvements in all spheres of individual and collective functions to take the nation to new h i h of achievement f i k h i heights f hi To develop the spirit of inquiry and reform, a scientific temper and sense of humanism To provide defense and national service when called upon to the country during hours of crisis To preserve the natural environment of India like the forests, lakes, rivers and wild life and to have a compassionate outlook towards the living creatures

Business Laws
MMS : Semester I Session 4

Introduction to Company Law

Topic - 3

Organization Structures
Sole Trader Partnership Firms Co-operative Society Company C Companies formed under a special law of Parliament

Introduction to Companies Act, 1956

Com = Together + pains = bread Adopted from the English Law Act is applicable to whole of India 658 Section 15 Schedules

Features of a Company
Association of Persons Separate Legal Entity Limited Liability Perpetual Succession p Separate Property Common Seal Transferability of Shares y Number of members

Illegal Associations
No company, association or partnership consisting of more than ten persons shall b f h ll be formed f th purpose of carrying on th b i d for the f i the business of banking, unless it is registered as a company under this Act No N company, association or partnership consisting of more th i ti t hi i ti f than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the p y, p p, y company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act Every member of a company, association or partnership carrying on y y y g business in contravention of this section shall be personally liable for all liabilities incurred in such business.

Type of Companies
Private Companies Public Companies Government Companies Section Companies N t F P fit C S ti 25 C i Not For Profit Companies i

Further bifurcation of companies p

Companies Limited by Shares Companies Limited by Guarantee

Company, Private Limited Company

"company" means a company formed and registered under this Act "private company" means a company which has a minimum paidup capital of one lakh rupees or such higher paid-up capital as may p p p g p p p y be prescribed, and by its articles : a) restricts the right to transfer its shares, if any; b) limits the number of its members to fifty; c) Prohibits any invitation to the public to subscribe for any shares in, in or debentures of the company; of, d) Prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives;

Public Company
"public company" means a company which a) is not a private company; b) has a minimum paid-up capital of five lakh rupees or such paid up higher paid-up capital, as may be prescribed; c) is a private company which is a subsidiary of a company which is not a private company;

Holding & Subsidiary Company

A Company shall be deemed to be a subsidiary of another if a) that other controls the composition of its Board of directors; or b) that other other i. where the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more th h lf of th t t l voting power of such t l than half f the total ti f h company; ii. ii where the first-mentioned company is any other company, first mentioned holds more than half in nominal value of its equity share capital; or

c) )

the first-mentioned company i a subsidiary of any company th fi t ti d is b idi f which is that others subsidiary

Procedure for Formation of Company

Promoter Selection of type of Company Private or Public Approval of N A l f Name of the C f h Company F Form 1A Drafting key document M Memorandum of A d f Association i ti Articles of Association Certificate f Incorporation C tifi t of I ti Drafting Prospectus or Statement in Lieu of Prospectus Dating and Filing of Prospectus with the ROC Certificate of Commencement of Business

Flow Chart

Memorandum of Association
Name Clause Registered Office Clause Objects Clause Main Object Objects incidental or ancillary to attainment of main object j y j Other object Liability Clause y Limited Liability Unlimited Liability Capital Clause Authorized Capital

Articles of Association
Schedule I Part A Areas Covered in AoA Shares Issue, Forfeiture Members B d of Di t Board f Directors Manager & Secretary Common Seal Dividend and Reserve Accounts Winding Up

Ultra Virus & Indoor Management

ultra virus is Beyond the Powers ultra virus in relation with MoA and AoA Public documents Indoor M I d Management A A t AoA

Investors Rights : General Meetings

Type of Meetings Statutory Meeting Only once in the life time of the Company To be held within 6 months of incorporation (not earlier than 1 month f h from incorporation) ) Annual General Meeting Once every year Two Conditions to be satisfied : Once in every calendar year Gap between two AGMs not more than 15 months Extra-Ordinary General Meeting Any number of times For special reasons where matter cannot be delayed till next AGM

Board of Directors
Board is the Governing body of the Company Directors are members of the Company and NOT employees Directors are appointed by members thru election Directors are NOT owners of the Company Maximum number of directorship that could be held by a person - 15 p y p Companies Minimum number of directors : Private Company 2 Directors Public Company 3 Directors Maximum number of directors : 12 Directors (both Private and Public Cos) Central Government Permission for increase beyond 12 12.

Type of Directors
Additional Director Director in Casual Vacancy Alternate Director Managing Di t M i Director

Method of appointment Tenure

Appointment & Retirement of Director

Disqualification of Directors
he has been found to be of unsound he is an un-discharged insolvent or he has applied to be adjudicated as an insolvent and his application is pending; he has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less , p y p to six months, and a period of five years has not elapsed from the date of expiry of the sentence; he has not paid any call in respect of shares of the company held by him, h th hi whether alone or j i tl with others, and six months h l jointly ith th d i th have elapsed l d from the last day fixed for the payment of the call; or On order disqualifying him for appointment as director has been passed by a Court in pursuance of section 203 and is in force, unless the leave of the Court has been obtained for his appointment in pursuance of that section.

Vacation of Office
he fails to obtain within the time specified qualification shares, if any, required of him by the articles of the company; he is found to be of unsound mind or he applies to be adjudicated an insolvent or he is adjudged an insolvent; he is convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months; he fails to pay any call in respect of shares of the company held by him, whether alone or jointly with others, within six months from the last date fixed for the payment of the call he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the Board; he is a partner or any private company of which he is a director, accepts a loan, or any guarantee or security for a loan, from the company in contravention of section 295

Business Laws
MMS : Semester I Session 5

Constitution of India
Topic - 4

Preamble
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens: JUSTICE, social, economic and political; LIBERTY of thought, expression, belief, faith and worship; EQUALITY of status and of opportunity; and to promote among them all; FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation; IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY ADOPT, ENACT AND G O C GIVE TO O O OURSELVES THIS CO S S S S CONSTITUTION. O

Meaning
sovereign means supreme or independent. India is internally and externally sovereign - externally f ll free f from the control of any f h l f foreign power and d internally, it has a free government which is directly elected by the people and makes laws that govern the people Socialist means the absence of discrimination on the grounds only of caste, color, creed, sex, religion, or language. Under social equality all are equal q pp before law and has equal status and opportunities Secular implies separation of state and religion. It means the state will make laws without regards to any religion. India, therefore does not have an official state religion. Every person has the right to preach, practice and propagate any religion they choose. The government must not favor or discriminate against any religion. It must treat all religions equally. All citizens, citizens irrespective of their religious beliefs are equal in the eyes of law

Meaning
Democracy means citizens elect their governments at all levels

(Union, State and local) by a system of universal adult franchise; popularly known as 'One man one vote'. Every citizen, who is 18 years of age and above and not otherwise debarred by law, is entitled t vote. E titl d to t Every citizen enjoys thi right without any iti j this i ht ith t discrimination on the basis of caste, creed, color, sex, religion or education
Republic democratic republic is an entity in which the head of state is

elected, directly or indirectly, for a fixed tenure. The President of India is l t d by I di i elected b an electoral college f a t l t l ll for term of fi years. Th f five The Post of the President Of India is not hereditary. Every citizen of India is eligible to become the President of the country

Six Fundamental Rights

Right to equality * Right to freedom * Right against exploitation Right to freedom f li i Ri ht t f d of religion Cultural and educational rights Right to constitutional remedies

Right of Equality
Equality Before Law - All citizens enjoy equality before law. All enjoy equal protection of law. Equality before law however does not mean absolute equality or equality is among the unequal law, however, unequal. It means equality or equality among the unequal. It means equality among the similarly placed people. It does not prohibit the classification of persons into different groups. Prohibition of discrimination - It prohibits discrimination on grounds of religion, race, caste, sex or place of birth. No person can, on any of any of these grounds, be denied access to shops, hotels, public restaurants and places of public entertainment or the use of wells, tanks, bathing Ghats, and places of public resort. Equality of Opportunity - this right provides equality of opportunity for all citizens in mattes relating to employment or appointment to any office the state. However, qualifications can be fixed for various jobs. Abolition of Untouchables - For eradicating the evil practice of untouchables in India, the Constitution has abolished untouchable. Practice of untouchable in any form is an offence publishable by law. All citizens of India now enjoy equal status. Abolition of Titl - Th C Ab liti f Titles The Constitution prohibits th state f tit ti hibit the t t from conferring any titl on citizens. f i title iti However honors for military or academic distinctions can be given. This right does not prevent the grant of military decorations such as Parma Vir Chakra, Mahavir Chakra. Vir Chakra and Ashok Chakra.

Right of Freedom
Fundamental Freedoms of Citizens - All citizens have the right to: (i) Freedom of speech and expression. expression (ii) Freedom of assembly (iii) Freedom to form associations (iv) Freedom of associations. movement (v) Freedom to reside and settle (VI) Freedom of profession, occupation, trade or business. The Right to Freedom - like the right to equality is also not absolute. It is also subject to reasonable limitations. These freedoms have to be used without any violation of public order, public health, morality and security of state. Further, in respect of freedom of profession, trade, and business, the state can prescribe professional or technical qualifications. The State can also nationalize any industry or business. Protection against Arbitrary conviction - No person can be punished except for a violation of law. No person can be subjected to a punishment greater than the one prescribed by law. For one crime one punishment can be given. No person accused of any offence can be forced to give evidence against him him. Protection of Life and Liberty - It grants protection to the life and liberty of citizens as well as non-citizens. It says, No person can be deprive of his life and liberty except according to the procedure established by law law. Protection against Arrest and Detention - The Constitution also provides protection against arbitrary arrest and detention. Any person arrested by the police enjoys certain protections. He has a right to be informed about the grounds of his arrest. He has the right to consult his lawyer. g g g y He is to be produced before the nearest magistrate within a period of 24 hours of his arrest

Fundamental Duties
To respect and incorporate the ideals which were the very base of our national struggle for freedom f f d To follow the Constitution and respect its institutions, the National Flag and the National Anthem To spread the message of peace and brotherhood amongst all the Indian citizens irrespective of linguistic, religious and regional or sectional diversities To discontinue practices pertaining to the impairment of the dignity of women To protect and promote the sovereignty, unity and integrity of India To protect public property and to avoid violence To respect and preserve the rich heritage of Indian culture To contribute towards making improvements in all spheres of individual and collective functions to take the nation to new h i h of achievement f i k h i heights f hi To develop the spirit of inquiry and reform, a scientific temper and sense of humanism To provide defense and national service when called upon to the country during hours of crisis To preserve the natural environment of India like the forests, lakes, rivers and wild life and to have a compassionate outlook towards the living creatures

Intellectual Property Rights

Topic T i -5

Some hard facts

Results of Survey Conducted by the American Society for Industrial Security ( ASIS ) Jan97 - Jan 98 : Fortune 1000 Companies sustained losses of J J p more than $ 45 billion from proprietary information thefts Manufacturing organizations reported losses totaling nearly $900 million Of the 1300 companies surveyed by ASIS 1 100 had fallen prey ASIS, 1,100 to incidents of industrial espionage and 550 to suspected incidents of espionage. The White House Office of Science & Tech. Estimates that since 1990, six million jobs have been lost as a result of trade secret thefts

Types of IPR
Copyright py g Trademarks Patents Industrial Designs Geographic Indicators Integrated Circuits Undisclosed Information

What is IPR
Property created as a result of intellectual creative effort or commercial reputation and goodwill. Basic Features of IPR: Intangible Territorial Governed by Law of Land

Nature of intellectual property

IP is an intangible property IP holder has following rights: Right to exclusive user Right to prevent others Rights encapsulated in a time frame Ri ht t assign, t li Right to i to license Inheritable

Trademark
A mark used or proposed to be used in relation to g p p goods for the purpose of indicating a connection in the course of trade between the goods and some person having the right to use the mark

Trademarks

Trade & Service Mark

Mark includes : Device Heading Ticket Signature Letter Brand Label Name Word Numerical

or any combination there of

Function of Trademark
distinguish the products of one manufacturer from g p those of another indicate the source or origin of the goods represent the goodwill of the manufacturer guarantee of quality guarantee of authenticity create a feeling of trust aid to branding

Essentials of a good trademark

Easy to p y pronounce Easy to remember Easy to spell and write Should not be descriptive Should be short Appeal to EYE & EAR Satisfy statutory requirements

Statutory requirement to registration

Mark must be distinctive Adapted to distinguish Must not conflict Must not deceive N contrary to l Not law Must not be scandalous / obscene Must not hurt religious sentiments

Registration Process
Selection of mark Search Preliminary advice Application Examination Objection Obj i Advertisement Opposition Accept / reject g Proceeds to registration

Right of a trade mark owner

Right to use g Right to prevent others from using similar or deceptively similar marks Right to protection also extended to related classes statutory protection

TM

Similar Packaging

Infringement of TM
Falsifying the mark y g Falsely applying the mark Making / possessing instrument of falsification Falsely representing a TM as registered Selling goods falsely marked

Breach of Trademark
Injunction j Damages / account of profits Destruction of infringing mark Handing over possession of copies I Imprisonment & fi i fine Confiscation/ delivery of goods Search & seizure of infringing goods

Service Marks
Marks Which Are Capable Of Distinguishing Services Insurance Banking Hotels Laundry Education Ed ti Transport Research Laboratories

Copyright
Right To g reproduce the work ( incl. Storing ) issue copies of the work perform work in public communicate the work to the public make translation k l i make adaptation sell or give on hire

Scope
Copyright subsists in original py g g literary, dramatic, musical & artistic works cinematographic films sound recordings which are first published in India

Range of Copyright Protection

Product Packaging Scenic Arrangement Paintings Sculpture Drawings ( maps,..) Engravings Photographs Ph t h Architectural Works Computer Software Research Papers Computer databases Choreographic work

Basic Rules
No Copyright in ideas, themes, p py g , , principles p Creation must be independent Term of the Copyright : Life + 60 years Registration Of Copyright not a pre-requisite

Assignment of Copyright
Owner or prospective owner(future work) may assign copyright to any person wholly/ partially & either generally or subject to limitations and either for the whole term of copyright or any part thereof It must be in writing, signed by the assignor or by his duly authorized agent. Assignment of copyright in any work shall identify such work + specify rights assigned & duration and territorial extent of such assignment, Royalty payable

Patent
A right bestowed by the state, and which right vests in g y , g an invention. a right to prevent others from making use of an invention Reward the inventor Benefits to society - quid pro quo Technical advancement Encourage investment in infrastructure g Increase employment opportunities Encourage Research & Development Patent protection emphatically stated in US Constitution

Fundamental Principal
Patent Right subsists in an INVENTION g INVENTION must be New (novel) Useful (utility) N Non-obvious b i

What are not inventions

Frivolous Inventions Contrary To Laws Of Morality Method Of Agriculture Injurious To Public Health Mere Admixture Scheme, Plan Or System Contrary To Natural Laws Discovery Method Of Treatment Of Living Beings Prejudicial To Any Life Form Mere Arrangement Computer Program

Term of Patent

A process of manufacture of p substance used as food / medicine / drug

Five years from sealing or y f g seven years from date of patent whichever is shorter

Any other invention

Fourteen years from date of patent

Design Act
A registered design includes - features of shape, configuration, Pattern, ornament or composition of lines or colors, pp y Applied to any article either in two or three dimensions or in both forms by any industrial process which in the finished article appeal to and are judged by the eye. Term : Protection for 15 years ( renewable )

Geographic Indicators
Protection give to g indications which identify goods as originating from/manufactured in a particular territory where a given quality, reputation or other characteristics of the goods h h i i f h d is essentially attributable to that region

Business Laws
MMS : Semester I Session 6

Consumer Protection Act

Topic - 6

Consumer Rights
Right to be protected against the marketing of goods and services which are hazardous to life and property Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumer against unfair trade practices Right to be assured , wherever possible , access to a variety of goods and services at competitive prices Right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums Right to seek redressal against unfair trade practices and g g p unscrupulous exploitation of consumers Right to consumer education

Consumer
buys any goods for a consideration (paid or promised) includes any user of such goods other than the person who buys such goods for consideration (paid or promised), when such use is made with the approval of such person, does not include a person who obtains such goods for resale or for any commercial purpose; hires or avails of any services for a consideration (paid or promised) includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration (paid or promised) hires does not include a person who avails of such services for any commercial purposes;
commercial purpose does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment; y f f p y ;

Goods
Goods" means every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale

Service
Service means, service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging both, housing construction, entertainment, amusement or l d i or b th h i t ti t t i t t the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

Commercial Purpose
A tractor purchased primarily to till the land of the purchaser and let out on hire during the idle time to till the land of others does not amount to commercial use To determine weather the goods are purchased for commercial purpose or not has to be decided on weather goods were to be used for profit making activities on large scale or for use in small ventures in order to make a living.

Who is a consumer
Widow of a deceased policy holder is a consumer. Consumer includes any beneficiary of service y gy Consumer also includes a family member. A minor was wrongly diagnosed and the National Commission awarded compensation to both Minor and his parents separately Under the act, a transaction of sale and purchase of goods should have already taken place and complaint must relate either to any defect in the goods or charging excessive price by trader of goods g g g p y g Passengers travelling by trains on payment of stipulated fare charged for ticket are consumers and the facility of transportation consumers by rail provided by railway administration is service

Who is a consumer
University in conducting examination, evaluating answer sheets and publishing the results was not performing any service for consideration and a candidate who appears for the examination cannot be regarded as a Consumer Alex Rebello v/s Vice Chancellor,
Bangalore U i B l University it

Consumer needs protection against

Unfair trade practice R t i ti t d practice Restrictive trade ti Defects Deficiencies

Restrictive Trade Practice

Manipulation of price or its conditions of delivery or to affect flow of supplies in market relating to goods or services in a manner as to impose on consumer unjustified costs or restrictions Collusive tendering; market fixing territorially among competing suppliers, depriving consumers of free choice, fair competition. Supplying only to particular distributors or on condition of sale only within a territory. Delaying in supplying goods/services leading to rise in price. Requiring a consumer to buy/hire any goods or services as a precondition for buying/hiring other goods or services.

Unfair Trade Practices

Adopting unfair methods or deception to promote sale, use or p g p p , supply of goods or services e.g. Misleading public about price (e.g. bargain price when it is not so). Charging above MRP printed. Misleading public about anothers goods or services. M l d bl b h d Falsely claiming a sponsorship approval or affiliation sponsorship, affiliation. Offering misleading warranty or guarantee

Defects & Deficiency

Defects
Any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by b or under an la for the time being in force or under an any law any contract express or implied or as is claimed by the trader in any manner whatsoever in relation to any goods.

Deficiency
Any fault imperfection shortcoming or inadequacy in the fault, imperfection, quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to b performed b a person i pursuance h b d k be f d by in of a contract or otherwise in relation to any service.

Case Studies
Ornaments kept in the bank locker were found lost, though the certificate by custodian of the bank stated that all lockers operated have been checked and found properly locked. The bank was held guilty of negligence and therefore liable to make good the loss.
(Punjab National Bank / K.B. Shetty) (P j b N ti l B k v/s K B Sh tt )

Yatri Sangh v/s General Manager, Northern Railway)

Cancellation of train service by railways due to disturbance involving violence so as to safeguard the passengers as well as its l l f d h ll own property does not constitute deficiency in service (Dainik Rail

Non-delivery of a video cassette by a courier service company resulting in complainant losing admission to the desired college was held h ld as d fi i deficiency i service. It was t t d as neglect and f il in i treated l t d failure on the part of the courier to deliver the article entrusted to them for carriage (Skypack Courier v/s Ms. Anupama Bagla)

Consumer Redressal Forum

Amount of Compensation You Seek Up to Rs. 20 Lakh

Court District Consumer Disputes Redressal Forum State Consumer Disputes Redressal Commission l National Consumer Disputes Redressal Commission

President

Must be qualified to be a District Judge Judge. Must be a person who is p or has been a Judge of a High Court. Must b a person who is be h or has been a Judge of the Supreme Court

Rs. Rs 20 Lakh to Rs. 1 Rs Crore Higher than Rs. 1 Crore

Money Laundering Act

Topic 7

What is Money Laundering ?

Money laundering is the practice of disguising illegally obtained funds so that they seem legal. It is a crime in many jurisdictions with varying definitions. It is a key operation of the underground economy. Terrorism, illegal arms sales, financial crimes, smuggling and activities of organized crime, including drug trafficking and prostitution rings, generate huge funds. When a criminal activity generates substantial profits, th i di id l or group i t b t ti l fit the individual involved i l d in such activity routes the funds to safe heavens by disguising the sources, changing the form, or moving funds to a place where they are less likely to attract attention attention.

Money Laundering Process

Placement Stage Cash paid into bank (sometimes with staff complicity or mixed with proceeds of legitimate business). Cash exported. Layering Stage Wire transfers abroad (often using shell companies or funds disguised as proceeds of legitimate business). Integration Stage False loan repayments or forged invoices used as cover for laundered money. money

Complex web of transfers Cash deposited in g y ( overseas banking system. (both domestic and international) makes tracing original source of funds virtually impossible. impossible Resale of goods/assets. Income from property or legitimate business assets appears "clean".

Cash used to buy high value goods, property or goods business assets.

Money Laundering Act, 2002

Sec 3 whoever, acquires, owns, possesses, or transfers any proceeds of crime or knowingly enters into any transaction which is related to proceeds of crime directly or indirectly conceals or aids to concealment of the proceeds of crime, shall be guilty of offence of money l laundering. d i Sec 4 any person who commits the offence of money laundering shall be punishable with rigorous imprisonment for a term, not less than 3 years and fine up to Rs. 500,000 However , if proceeds of crime relate to offence specified under Narcotic Drugs & Psychotropic Substances Act, then punishment may extend to rigorous imprisonment for a term of 10 years

Know Your Customer Guidelines ~ AML Standards

Guidelines issued by RBI on November 29th 2004

Objective of KYC
Prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. y p y Key elements of KYC policy Customer Acceptance Policy Customer Identification Procedures Monitoring of Transactions Risk Management

Need for KYC

To establish the identity of the client, by using reliable, independent source documents, data or information For individuals, banks require to obtain identification data to verify the identity of customer, his address/location and also his recent photograph For non-individuals Verify the legal status of the legal entity y g g y Verify identity of the authorized signatories Verity identity of the beneficial owners / controllers of account

Questions / Comments ?
Rohit Bhagwat
Cell : 99308-96787 rohit.bhagwat@gmail.com hit bh t@ il