UNIT V COMMERCIAL LAW.pptx

8/20/2019 UNIT V COMMERCIAL LAW.pptx

1/61

THE INDIAN CONTRACT ACT 1872Definition of contract, essentials elements and types of a contract, Formation of a

contract,performance of contracts, breach of contract and its remedies, Quasi

contracts - Contract Of Aenc!" Nature of agency, Creation and types of agents,

Authority and liability of Agent and principal: Rights and duties of principal and

agents, termination of agency.

THE #A$E O% &OOD# ACT 1'()

Nature of ales contract, Documents of title, ris! of loss, "uarantees and

#arranties, performance of sales contracts, conditional sales and rights of an

unpaid seller - Neotiab*e Instruments Act $%%$: Nature and re&uisites of

negotiable instruments. 'ypes of negotiable instruments, liability ofparties, holder

in due course, special rules for Che&ue and drafts, discharge of negotiable

instruments.

+NIT , CO--ERCIA$ $A.


2/61

Contract

Contract is an agreement made betweentwo or more parties which the law willenforce. It has two elements.

1. Agreement

2. It is enforceable by law

Agreement = oer + AcceptanceContract = Agreement + Enforceability bylaw


3/61

The essential Elements of ValidContract

1. Oer & acceptance – er m!st be de"niteacceptance of oer m!st be absol!te and!nconditional

2. Intention to create legal relationship – #hen

the two parties enter in to an agreement$ theirintention m!st be to create legal relationship.

3. Lawfl consideration – It means something inret!rn.

!. Capacit" of parties # competenc" – m!st becapable of entering into the contract. Ie$ so!ndmind$ ma%or.


4/61


5/61

%ormation Of Contract

&he re)!irements for formationof contract are 1.agreement and2.consideration. &here is sometimes

said to be a third element$ namely$ *.intention to create legal obligation .


6/61

*greement egal bligation

Consideration


7/61

Classi/cation of

contracts

LegalEects

0erformance

%ormation

1. Valid Contract2. Void Contract3. Voida'le

contract!. nenforcea'le

contract$. Ille al

1. nilateralContract

2. ilateralcontract

3. Eected

contract

1. EpressContract

2. Impliedcontract

3. 4asi contra


8/61

Classi/cation 'ased on legaleects

Valid Contract –An agreement

becomes a (alidcontract when itf!l"ls all theessentials of acontract as laiddown in section 1,.


9/61

Eample

( -ophi oers Ar!n to sell his ho!se fors * a/hs. 0al! agrees to b!y theho!se for this price. It is a (alid

contract.


10/61


Void Contract –Acontract becomes

(oid when it ceasesto be enforceableby law.


11/61


Voida'le contract– An agreement

which isenforceable by lawat the opinion ofone b!t not at theopinion of the otheror the others is a(oidable contract.


12/61

Eample

( If the consent sanction of the partywas ca!sed by coercioncomp!lsionthe contract is enforceable at the

option of the party whose consentwas not free.


13/61


nenforcea'lecontract – An!nenforceable contract

is one which cannot beenforced in a co!rt oflaw beca!se of sometechnical defects s!ch

as absence of writing$time barred$ want ofstamps etc.


14/61

Eample

( #hen the promissory note is !nder –stamped$ the agreement thereinbecomes !nenforceable beca!se of

that technical defect.

( 3romissory 4ote 5 A "nancialinstr!ment that contains a written

promise by one party to pay anotherparty a de"nite s!m of money.


15/61


Illegal Contract –An illegal

agreement is onewhich criminal innat!re or which isimmoral or which isagainst p!blicpolicy.


16/61

Eample

( A contract to commit dacoit is anillegal contract.

( 6acoit is a term !sed by the Indianpolice forces to classify criminals.


17/61

Classi/cation 'ased on0erformance

nilateral contract – A!nilateral contract is onein which only one party

has to f!l"ll his obligationat the time of theformation of the contractand the other partyha(ing f!l"lled hisobligation at the time ofthe contract or beforecontract comes intoe7istence.


18/61

Eample

( Amina permits a coolie to p!t hisl!ggage to a carriage. &he contractcomes into e7istence as soon as the

coolie place the l!ggage. -o Aminahas only to f!l"ll his part.


19/61


ilateral Contract –A bilateral contract isone in which theobligation on the partof both the parties tothe contract are

o!tstanding at thetime of the contract.


20/61

Eample

( Ath!lya promises to paint a pict!re inret!rn for which -aranya promises tos 1,,,.


21/61


EectedContract – If both

parties of acontract ha(eperformed theirrespecti(eobligation$ contractis /nown as ane7ec!ted contract.


22/61


23/61


Eector" contract –An e7ec!tory contractis one in which both

parties ha(e not yetperformed theirobligations eitherwholly or in whichthere remainssomething to be doneon both sides.


24/61

Eample

( ah!l agrees to paint a pict!re fore%ith for s. 8,,. ah!l has notpainted the pict!re and e%ith has

not paid the price also.


25/61

Classi/cation 'ased on%ormation

Epress contract -If the terms of acontract aree7pressly agreed!pon whether orallyor in writing at the

time of the formationof the contract$ thecontract is said to bean e7press contract.


26/61

Eample

( Collin writes to Aby 9 I am willing tosell my car to yo! for s 8,$,,,:.Aby accepts Collin;s oer by another

letter.


27/61


Implied contract- An implied

contract is onewhich is inferredfrom the act orcond!ct of theparties or co!rse ofdealings betweenthem.


28/61

Eample

( 6il%ith gets into a p!blic b!s. &hen heenters into an implied contract withthe a!thorities of the b!s that he

wishes to tra(el in the b!s.


29/61


4asi Contract -


30/61

Eample

( Ai%! $ a trademan lea(es goods at-a%id;s ho!se by mista/e. -!ppose-a%id treats the goods as his own$

then -a%id is bo!nd to pay to Ai%! areasonable price for the goods.


31/61

( FFER - According to ec.)*a+, hen a person made a

proposal, hen he signify *indicate+ to another his illingnessto do or to abstain *ithdra+ from doing something.

C4-E4-


32/61

&3E- > >>E

Express ofer Implied ofer

Specic ofer General ofer Cross ofer Counter ofer Standing ofer


33/61


34/61

Cross offer -

When both the persons

are making identical offers to each other

in ignorance of other’s offer.

Counter offer - When both the

persons are making offers to each other

which are not identical in ignorance of

other’s offer.

Standing offer -

An offer whichremains continuously enforceable for a

certain period of time.


35/61

LEGAL RULES F R FFER

Offer must be given with an intention tocreate a legal relationship.

Offer must be definite.

There is a clear cut difference betweenoffer, invitation to offer, invitation to sale.

Offer must be communicated.

Mere statement of price is not an offer.


36/61

When a party to an agreement promises to

do something heshe must get !something"

in return .This !something" is defined as

consideration.

CONSID RATIO

N


37/61

L GAL RL S !or CON SID RATION

1)It must move at the desire o the promisor.

2)It ma move ! the promisee .

")It must !e past #present or uture . $)It need not !e ade%uate .

&)It must !e real .

')It must not !e illegal # immoral or

opposed to pu!lic polic .


38/61

Capacit" to

contract

>ollowing are the condition for aperson to enter into contract

( ?e m!st be ma%or( ?e m!st ha(e so!nd mind

( ?e m!st not be dis)!ali"ed by

any other law.


39/61

Void agreement.

An agreement not enforceable by law is

said to be (oid.

Void Contract and 4asi - contract.

( Void Contract A contract which ceasesto be enforceable by law becomes (oid

( 4asi - contract A )!asi – contract isnot a contract at all. A contract is

intentionally entered into by the parties.


40/61

By whom must contracts be performed?

1. 3romisor himself.

2. Agent

*. egal representati(es.

@. &hird person.

8. oint promisors.


41/61


42/61


43/61


44/61


45/61


46/61


47/61


48/61


49/61


50/61


51/61


52/61


53/61

/0A1 CON'RAC'


54/61

#hat Are /uasi Contracts2

( B!asi; means Balmost; orBapparently b!t not really; or Basif it were;

( A )!asi contract is a contractthat e7ists by order of a co!rt$

not by agreement of the parties( Co!rts create )!asi contracts to

a(oid the !n%!st enrichment of a

party in a disp!te o(er payment


55/61

INTRODUCTION

( Most common of all the commercialcontracts

( Came into force on 1st JULY,1930.

( Are subject to the general legal principlesapplicable to all the contracts such as,offer & its acceptance, consideration.


56/61

8D

ESSENTIALS OF VALID SALE

CONTRACT

( Two parties:There must be 2 distinct parties i.e., a buyer and a seller

( Goods:Goods which form the subject matter of the contract of sale

must be movable. ( Price:The consideration for the contract of sale, called price, must be money( Essential elements of a valid contract:Acontract is made by an offer to buy or sell goodsfor a price and the acceptance of such offer.


57/61

8

SALE AND AGREEMENT TO SELL

( Property in the goods is transferred fromthe seller to the buyer- sale

( Transfer of the property in the goods is to be taken place at some future date or afterfulfillment of some condition,

-AGREEMENT TO SALE


58/61

8F

SALE AND AGREEMENT TO SELL

-ale1.Ownership is with the buyer

2.Executed contract3.Sue for price, in case of breach

4.Goods lost by accident

then loss falls on the buyer.

Agreement to sell

1.Ownership is with theseller

2.Executory contract

3.Sue for damages only, incase of breach

4.Goods lost by accidentthen loss falls on theSeller.


59/61

8G

CONDITION AND WARRANTY

Condition1.Its is a term in contractwhich is essential.

2.When condition breaches?

3.Breach of condition can

be breach of warranty

#arranty1.Its a term in contractwhich is collateral.

2.When warranty breaches?

3.Breach of warrantycannot be breach ofcondition.

EXPRESS AND IMPLIED CONDITIONS


60/61

D,

EXPRESS AND IMPLIED CONDITIONS

AND WARRANTIES

( Condition or warranty may bee7pressed

( E7press condition and warranty aree7pressly pro(ided in the contract.

( Implied Condition or warranty arepro(ided by the law.


61/61

WHO IS AN UNPAID SELLER

( A seller of goods is deemed to be anunpaid seller:-

( When the whole of the price has not beenpaid or tendered

( When any negotiable instrument isdishonoured

UNIT V COMMERCIAL LAW.pptx

Documents

Transcript of UNIT V COMMERCIAL LAW.pptx