Legal Aspect of Business

Law of contract

An agreement enforceable by law is contract. Section: - 2(h)

“Every contract is an agreement but all contracts are not agreements” explain:-

According to section 6: To become a contract it has to fulfill ten essential element of contract, they are following:-

1.       Offer and acceptance: There must be a lawful offer by offer by one party and a lawful acceptance by another party or parties.

2.       Intention to create legal relationship: There must be an intention (among the parties) that the agreement shall result in or create legal relations.

3.       Lawful consideration: Consideration may be past (something already done or not done). It may also be present or future. But only those considerations are valid which are “lawful”.

4.       Capacity of parties: The parties to an agreement must be legally capable of entering into an agreement; otherwise it cannot be enforceable by a court of law.  

5.       Free consent: In order to be enforceable, an agreement must be based on the free consent of all the parties.

6.       Legality of the object: The object for which the agreement has been entered in to must not be illegal, immoral or opposed to public policy.

7.       Possibility of parties: The agreement must be capable of being performed. A promise to do an impossible thing cannot be enforceable.

8.       Certainty: The agreement must not be vague.

9.       Void agreement: An agreement so made must so made must not have been expressly declared to be void.

10.   Weighting, Registration and legal formalities: An oral contract is a perfectly good contract, except in those cases where writing and/or registration is required by some statue.

An agreement which fulfills all the essential elements is enforceable by law and is called a contract.

Offer and acceptance

 Offer and acceptance: There must be a lawful offer by offer by one party and a lawful acceptance by another party or parties.

Types of offer:-

1. General offer: An offer sent to all person/ or to the world large is called a general offer.
2. Specific offer: An offer made to definite person, definite class of parson is specific offer.

1. Offer to specific individual
2. Offer to specific group.

* Rules regarding to offer:-  

1. An offer may be express or may be implied from the circumstances.
2. An offer may be made to a definite person definite class of person or to the world large.
3. Legal relationship required.
4. The terms of the offer must be must be certain, definite unambigus and not vague.
5. A mare statement of intention is not an offer.
6. An offer must be communicated with offeree.
7. An offer may be conditional.

Acceptance

* Rules regarding to acceptance:-

1. It must be an absolute and unqualified acceptance to all the terms of the offer.
2. Conditional acceptance is not an acceptance is not acceptance but a counter offer or counter proposal.
3. Contracts subject to condition.
4. Clarification of offer is must (where-ever necessary).
5. The acceptance must be expressed in some usual or reasonable manner.
6. Mental acceptance or uncommunicated assent does not result in a contract or acceptance.
7. The offeree must be follow the particular mode of acceptance.
8. The acceptance must be done with in prescribed or specified time.
9. There cannot be an acceptance before the offer is given from any person.
10. The acceptance must be made while the offer is in force.

* When does an offer lapse?

1. By notice: If the offer gives notice of revocation to the other party, i.e. expressly withdraws the offer, and the offer comes to an end. An offer may be revoked any time before acceptance but not afterward.
2. By lapse of time: When a proposer prescribe time within which the proposal must be accepted, the proposal lapses as soon as the time expires.
3. After expiry of reasonable time: If no time is prescribed, the proposal lapses after the expiry of a reasonable time. What is the reasonable time will depend on the circumstances of the case.
4. By failure of condition precedent: An offer lapses by the failure of acceptor to fulfill a condition precedent to acceptance, where such a condition has been prescribed. Expel: P says to Q “I will sell my house tk 50000 if you are married.” The offer cannot be accepted until or unless Q is married.
5. By death or insanity: An offer lapses by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.
6. Counter offer: When a counter offer is given original offer lapse.
7. By refusal: A proposal once refused is dead and cannot be revived by its subsequent acceotence.          

 

Consideration

Consideration is the subject matter which belongs between offer and acceptance.

Types of consideration:-

1. Past consideration.
2. Present consideration.
3. Future consideration.

* Rules regarding to consideration.

1. Desire or request of the promisor is essential.
2. The consideration must be real.
3. Public duty will not amount to consideration.
4. Promise to stranger is enforceable.
5. Consideration need not be adequate (if the contract is made with free consent).
6. The consideration must not be illegal, immoral or opposed to public policy.
7. The consideration may be present, past or future.
8. Consideration may move from the promise or from any other person.

What is a good consideration?

Subject to the essential factor a good consideration may be following.

1. Physical goods.
2. Services.
3. Forbearance (for not to sue)
4. Arbition or compromise of disputed claims.
5. Settlement or composition with creditors.

Exception to the rule “no consideration no contract”

1. Natural love and affection.
2. Voluntary compensation
3. Time barred debt.
4. Agency: No consideration is required to create an agency.
5. Completed gift.

Void and voidable agreement

“An agreement not enforceable by law is said to be void” section: 2(g). A void agreement has no legal affect.

There are certain agreements expressly declared to be void even though they may otherwise satisfy section-10 law of contract. They are follows,

1. Every agreement in restraint of marriage of any person, other than minor, is void. [section:- 26]
2. Every agreement by which anyone is restraint from exercising a lawful profession, trade or business of any kind, is to that extent void. [section: 27]
3. Private individuals cannot by agreement alter or very their personal law or the attitude law is said to be void. [section: 28]
4. The agreement the meaning of which is not certain or capable of being made certain are void. [section: 29]
5. Agreement by way of wages/wagering agreement are void. [section:30]
6. Agreement to do an act impossible in itself is void. [section: 56(1)]
7. Section [24, 57, 58] mention that agreements whose objects or considerations are unlawful are void.

Capacity of parties

From section 11, it follows that; a person is incapable of entering into contracts under the following circumstances,

1. If he has not attained the age of majority according to the law to which he is subject.
2. If he is not of sound mind (if he is lunatic or an iodate or suffering from similar dis abilities).
3. If he is disqualified from contracting by any law to which he is subject.

Who is a minor?

According to the majority act, a minor is one who has not completed his or her 18 years of age.

There are two exceptions to the rule.

1. When a guardian of the minors person or property is appointed by a court of law.
2. When a minors property is taken over by the court of wards for management. In either cases a person become major of the age of 21^st year.

Law regarding minor’s agreement.

1. Minor’s agreement is void.
2. A minor can be a promisee.
3. Minor’s liability for necessary.

* A Person unsound mind.

As per section 12 a person is said to be of sound minded for the purpose of making a contract. If at the time when he makes contract, he is not capable of understanding it and of forming national judgment as to its effect upon his interest.

Example:-

1. Idiocy.
2. Lunacy & insanity.
3. Drunkenness.

* Disqualified person.

1. Aliens: Citizen of a foreign state.
2. Foreign sovereigns.
3. Company & Corporation
4. Professional person
5. Women

* Under section: -15 coercion is defined.

Coercion is the committing or threatening to comit, any act forbidden by code or unlawful or threatening to detain any property to the prejudice of any person to enter into an agreement.

Features:-

1. Coercion means committing or threatening to commit an act forbidden by the code or the unlawful detaining or threatening to detain any property.
2. The act, constituting coercion, must be directed at any person and not necessarily at the other party of the agreement.
3. The act, constituting coercion, must have been done or threated with the intention of causing any person to enter any agreement.
4. It does not matter whether the penal code is or is not in force in the place where the coercion is employed.

Example:-  P threatens to Q shoot if he does not let out his house to P and Q agrees to do so. The agreement has been brought about by coercion.

* When undue influence is suspected?

1. Inadequacy of consideration.
2. Fiduciary relationship between the parties.
3. Inequality between the parties as regards age, intelligence, social status etc.
4. Absence of independent advisors for the worker party.
5. Unconscionable bargains is one which against the conscience of reasonable persons and what shocks the public. If excessive profit is made it will also be written this term.

* Difference between fraud and misrepresentation.   

1. Different intention: In misrepresentation there is no intention to deceive. Fraud implies as an intention to deceive.
2. Different believe: The difference between misrepresentation and fraud depends on the believe of the person making the statement. If the statement is honest, even though it was wrong, there is only misrepresentation. If statement is dishonest is case of fraud.
3. Different rights: In case of fraud the party aggrieved can rescind the contract (i.e. the contract is voidable of his option). He can also sue for damages. In case of misrepresentation the only remedy is rescission. There can be no suit for damages.

4.       Different defense: In case of misrepresentation if the circumstances were such that the aggrieved party might have discovered the truth with ordinary diligence, the contract cannot be avoidable. The same case there is fraudulent silence. In other case fraud this is no defense.

Wagering Agreement

Definition: A wager is an agreement by which money is payable by one person to another on the happening or non-happening of a future, uncertain event. The essence of gaming and wagering is that one party is to win and the other to lose upon a future event, which at the time of the contract is of an uncertain nature.

* Characteristics of wagering agreements:

1. The consideration for the promise under a wagering agreement is to pay or get money.
2. The money is payable on the happening or the non-happening of an event.
3. The agreement depends on a future an uncertain event.
4. The essence of gaming and wagering is that one party is to win and other party loses.
5. In wagering agreement no party has control over the event.
6. Commercial transactions are valid, but to pay price differences in a wagering agreement is void.

Exceptions:

1. Shares: Share market transection in which there is clear intention to give and take delivery shares.
2. Games of skills: Prizes and competitions which are games of skills, e.g. picture puzzles; athletic competition etc.
3. A statutory exceptions: An agreement to contribute to the payment of a prize of the value tk. 500 or upwards are valid.
4. Contract of insurance:  A contract of insurance is not a wagering agreement.
5. Badla: “Badla” transections are exactly similar to the transections of conversions or carrying over in the terminology of the Stock Exchanges with regard to dealings in securities.

* Termination or discharge of the contracts.

1. By performance of the promise or tender.
2. By mutual consent cancelling the agreement or substituting a new agreement in place of the old.
3. By subsequent impossibility of performance.
4. By operation of law i.e. death, insolvency or merger.
5. By lapse of time.
6. By material alteration without the consent of the other parties.
7. By breach made by one yearly.

                         Law relating to Negotiable Instrument

ü  Definitions

Negotiable Instruments :Documents of a certain type, used in commercial transactions and monetary dealings are called Negotiable Instruments .

“Negotiable means transferable by delivery and instruments means a written documents by which a right is created in favour of some person .The term negotiable instrument , literally means a documents transferable by delivery . In English mercantile law the term is used in this wide sense . Thus a negotiable instrument is one in which , “the true owner could transfer the contract or engagement contain therein by simple delivery of the instrument .

The India the term negotiable instrument is used in a restricted sense. The law relating to such instrument is contained in the negotiable Instrument Act of 1881 which state that “A negotiable Instrument means a promissory note, bill of exchange or chaque payable either to order or to bearer.

ü  Promissory note (Pro note or Hand note )

Definition

A promissory note is an instrument in writing (not being a bank note or a currency note ) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to , or to order of a certain person , or to the bearer of the instrument .

The person who makes the promise to pay is called the maker . He is the debater and must sign the instrument .The person who will get the money is called payee.

Essential Elements

From the definition given in the Act it is apparent that the following essential requirements must be fulfilled by the instrument intended to be promissory note :

1.       The Instrument must be in writing .

2.       The Instrument must be signed by the maker .

3.       The Instrument must contain a promise to pay . The promise to pay must be expressed . It cannot be Implied of inferred . A mere acknowledgement of indebtedness is not enough.

4.       The maker of the instrument must be certain or definite.

5.       A promissory note must be stamped according to the Indian Stamp Act.

ü  Bill of Exchange

Definition

A bill of exchange is an instrument in writing containing an unconditional order signed by the maker directing a certain person to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument .

Essential  Elements of a Bill of Exchange

A bill of exchange to be valid must fulfil the following requirement :

1.       The Instrument must be in writing .

2.       The Instrument must be signed by the drawer .

3.       The Instrument must contain an order to pay , which is expressed and unconditional .

4.       The drawer drawer the payee must be certain and definite individuals.

5.       The amount of money to be paid must be certain .

ü  Difference between a Promissory notes and Bill of exchange

 Number of Parties In a promissory note there are two parties the maker and the payee. In a bill of exchange there are three parties the drawer, the drawer and the payee.              

Promise and order In a promissory note there is a promise to pay . In a bill of exchange there is an order to pay .

Acceptence The promissory notes is signed by the person liable to pay therefore no acceptance is necessary . A bill of exchange except in certain cases required to be accepted by the drawee before it is binding upon him.

ü  Cheque

Definition A cheque is a bill of exchange drawn upon a specific banker and payable on demand .

Essential features of Cheque

1.       A Cheque must fulfill all the essential requirements of a bill of exchange .

2.       A Cheque may be payable to bearer or to order but in either case it must be payable on demand .

3.       The banker name must pay it when it is presented for payment to him at the office during the usual office hour provided the cheque is validity drawn and the drawer has sufficient funds to his credit.

ü  Different types of cheques

There are two types of cheques : Open Chaques and Cross Cheque

An open Cheque is one which is payable in cash across the counter of the bank.

A cross cheque is one which has two short parallel lines marked across its face.

Distinction between Bill of exchange and Cheque

1.       A bill of exchange can be drawn upon any person including a bank . A cheque can be drawn only upon a bank . Thus every cheque is a bill of exchange but every bill of exchange is not a cheque .

2.       Except under certain specific circumstances a bill of exchange requires acceptance . A cheque does not required any acceptance.

3.       A cheque is always payable on demand . The acceptor of a bill of exchange is allowed  a grace period of three days after the maturity of the maturity of the bill to make the payment .

ü  Essential features of Negotiable Instrument

1.       Writing and Signature

Negotiable Instrument must be written and signed by the parties according to the rules relating to            promissory notes . bill of  exchange and cheques .

2.       Money

Negotiable Instrument are payable by legal tender money of India . The liabilities of the parties of Negotiable instruments are fixed and determined in terms of legal tender money.

3.       Notice

It is not necessary to give notice of transfer of negotiable instrument to the party liable to pay . The transferee can sure in his own name .

ü  Bankers Draft

A bill of exchange is sometimes called a draft . A bill of exchange drawn by a bank is called bankers draft.

The characteristics feature of Bank draft are stated below

·         It is drawn by a banker upon its branch or upon another bank.

·         It is payable on demand

·         It cannot be payable to bearer

ü  Different  types of Bills and Notes

Joint Notes and Bills

A promissory notes or a bill of exchange may be signed by two or more person jointly . In such cases their liabilities are joint and several.

Undated Notes and Bills

A negotiable instrument without a date is not necessary invalid.

Ambigious Instrument

An instrument which owing to faulty drafting can be interpreted either as a promissory note or as a bill of exchange is called an Ambigious Instrument .

Accommodation Bills

An accommodation bill is one which has been signed by a person as drawer acceptor without any consideration with a view to oblige some other person provide him with funds .

Documentary bill

A documentary bill is one to which documents of title like bills of lending are annexed. When the bill is accepted or paid the documents of title are handed over. This is the usual practice in foreign trade transaction .

ü  Acceptence And Negotiation

Definition

A bill of exchange is said to be accepted when the drawee puts his signature on it , thereby acknowledging his liability bunder the bill . There are certain special cases where a bill need not be accepted . Except in these cases the drawee is not liable on a bill until and unless he accepts the bill.

Mode of Acceptence

The usual mode of acceptance is writing the word accepted across the bill signature is . The signature may be put anywhere on the face of the bill or on the back of it .

Types of Acceptance

Acceptance may be either 1) General or 2) Qualified

Acceptance is General when it is unconditional and unqualified . When the drawee accepts liabilities to pay the amount mentioned in the bill in full without any conditional or limitation.

Acceptance is said to be qualified when the acceptor puts some conditions on the acceptance. 

ü  The presentment for acceptance

The time and place of presentment

A bill which required to be accepted must be presented for acceptance before the drawee or his authorized agent

Where acceptance is obligatory it must be made without reasonable time . It must be within business day . If the bill is directed to the drawee at a particular place . it must be presented at that place . When authorized by agreement or usage a presentment through the post office by a registered letter is sufficient .

Negotiation

Negotiation of an instrument is the process by which the ownership of the instrument is transferred from one person to another .

When a promissory note bill of exchange or cheque is transferred to any person so as to constitute that person the holder thereof the instrument is said to  negotiated.

Negotiation by delivery 

Subject to the provisions of section 58 a promissory note bill of exchange or chaque payable to bearer is negotiable by delivery there of .

Negotiation by Indorsement

Subject to the provisions of section 58 a promissory note bill of exchange or chaque payable to order is negotiable by the holder by indorsement and delivery thereof .

The duration of Negotiability

Instrument negotiable till payment or satisfaction a negotiable instrument may be negotiated until payment or satisfaction thereof by the maker drawee or acceptor at orn after maturity , but not after such payment or satisfaction .

Rights and Liabilities of parties

ü  Who can be parties to a negotiable instruments

Capacity to make etc of negotiation instruments

Every person capable of contracting may bind himself and be bound by a negotiation instruments . A person incapable of contracting cannot bind others . When some of the parties to a negotiable instruments are capable of contracting and some are not .

Minor

A minor may draw ,indorse  , deliver and negotiation instrument is not personally liable but the adult parties are . When an instrument is signed by a minor and an adult jointly the minor is not liable but the adult is . The defence of minority can be taken by the minor even though he might have concerning it .

Lunatic , Idiot and drunken person

The legal position is the same as in the case of minor s. A lunatic can however bind himself by a negotiable instrument if he signs it during a lucid interval.

Insolvent

After the order of adjudication is passed the properties of the insolvent vest in the official assignee or the official receiver .

ü  Liabilities of the  parties

Maker and Acceptor

The maker of a promissory note and the acceptor of a bill of exchange are primarily responsible  for the payment due . Section 32 of the act states that in the absence of a contract to the contrary

, the maker of the mromissory note and acceptor  a bill of exchange before maturity are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively.

Drawer                

The drawer of a bill of exchange or cheque is bound , in case of dishonor by the drawer or acceptor thereof to compensate the holder provided due notice of dishonor has been given to or received by the drawer .

Drawee of a cheque

The drawee of a cheque having sufficient funds of the drawer in his hands , properly applicable to the payment of such cheque must pay the chaque when duly required to do so and in default of such payment , must compensate the drawer for any loss or damage caused by such default.

ü  The Extent of Liabilities

Rules regarding compensation

Ø  The holder is entitled to the amount due upon the instrument together with the expenses properly incurred in presenting nothing and protesting it.

Ø  When the person charged resides at a place different from that at which the instrument was paysble the holder is entitled to receive such sum at the current rate of exchange between the two place.

Ø  When the person charged and such indorser resides at different places the indorser is entitled to receive such sum at the current rate of exvhange between the two places .

ü  Payment of negotiable instrument

Time of payment

 A promissory note or a bill of exchange may be payable on demand  or on a specific date or after a specific period of time .

              Maturity of a note or bill

The maturity of a bill or note is the date on which it falls due. A bill or note which is payable on demand becomes due immediately on presentation for payment .

Payment in due course

Payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in processing thereof under circumstances which do not afford a reasonable ground for believing that he is not entailed to receive payment of the amount therein mentioned .

Chapter -4

Carriage by Land

ü  Carriers : Definition , Classification and Characteristics.

Definition

Any person or an organization by an express or implied contract, with  or without remuneration carries goods and passengers is called a carrier . Government services can be called carrier if it comes within the above definition .

Classification

It is more usual to classify carriers into common carriers or public carriers and private carriers .

Characteristics of  common carriers

Ø  It may be a firm or an individual or a company . But the government is not included in the category .

Ø  Only carriers of goods come within the definition . A carrier of passanger is not a common carrier

Ø  A common carrier is one who is ready to carry the goods of any person without any discrimination.

 Duties of a common carrier

Must carry goods without discrimination

 A common carrier is bound to carry the goods of every person without any distinction but certain exception are recognized

Ø  If the customer is not willing to pay reasonable charges for the carriage

Ø  If there is no accommodation in the carriage .

Ø  If the goods are dangerous or are of a type which the carrier is not accustomed to carry.

  With safety

 The goods must be carried with reasonable precautions for their safety and over the usual and ordinary root.

Without deviation

Deviations are not permitted unless rendered necessary by exceptional circumstances.                

                                                                                                                                      

Right of a common carrier

Ø  When not bound to carry goods :A common carrier is not bound to carry goods under certain circumstances when he has no room when the goods are dangerous or not of a type he is accustomed to carry or when he is asked to carry goods to a destination to which he does not ordinarily travel .

Ø  Has lien : He has lien on the goods for his remuneration and can refuse to deliver the goods until his dues are paid .

ü  Carriage by Sea

The contract of Affreightment

The contract to carry goods by sea is called the contract of Affreightment . The consignor and the shipowner are the two parties to the contract . The consideration paid for the carriage is called the freight.

Charter Party

Definition

A charter party may be difined as an agreement in writing for the purose of carriage of goods . The person hiring the ship or a part of it is called the charter.

Classification

Ø  A charter party for a particular period of time is called a time charter.

Ø  A charter party for a particular voyage is called a voyage charter.

ü  The bill of lading

          Definition

  A bill of lading is a receipt for goods delivered to a ship for carriage . A bill of lading is used when the goods shipped form only a part of the cargo of the ship.

                                             

                                              Chapter -5

                              Partnership and companies act

ü  Definition and characteristics

Section 4 of the Partnership Act defines a partnership as follows Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for al. A partnership as defined in the act must have three essential elements

Ø  There must be an agreement entered into by two or more person .

Ø  The agreement must be to share the profit of a business.

Ø  The business must be carried on by all or any of them acting for all.

Who can be a partner

1)       Person : Under the Indian partnership act a person may be partner if he has the capacity to enter into a contract capacity of parties .

2)       Minor: A minor canot be a partner but in an existing partnership a minor can be admitted into a firm if all the partners of the firm agree.

3)       Person of unsound mind : A person who is of unsound mind cannot become a partner.

ü  Classification of Partners

Active Partner :  An active partner is one who actually participates in the business of the firm . A person becomes a partner only by agreement .

Dormant Pertner Sleeping or nominal Partner : These partner join the firm by agreement but do not take any active part in the business . Their liabilities are same as of active partner .

ü  Classes of partnership

Partnership at will : A partnership is called a partnership at will  when the partnership is not for a fixed period of time and when no provision is made as to when and how the partnership will come to and end

Particular Partnership  Joint Venture : a particular partnership is one which is formed  a particular undertaken .

Limited partnership : In great Britain according to the provision of the partnership act of 1907 a partnership may be formed in which the liability of the partners is limited .

ü  Rights and liabilities of partners

General duties of Partner : Partners are bound to carry on the business of the firm to the greatest common advantages to be just and faithful to each other and to render true accounts and full information of all things affecting the firm to any partner or his legal representative.

Indemnity

Every partner sall indemnity the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

Mutual Right and duties

Ø  A partner is not entitled to receive remuneration for taking part in the conduct of business

Ø  The partners are entitled to share equally in the profits earned and shall contribute equally to the losses sustain by the firm.

Ø  Where a partner is entitled to interest on the capital subscribed by him such interest sall be payable only out of profit.

ü  Duties of a Partner

A.       Justies , Faithfulness, True accounts, Fall information 

Partners are bound to carry on the business of the firm to the greatest common advantages to be just and faithful to each other and to render true accounts and full information of all things affecting the firm to any partner or his legal representative.

B.       To pay indemnity :Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

C.      To attened diligently : Every partner is bound to attend diligently to his duties .

ü  Minor admitted as a partner

Ø  The minor has a right to such share of the property and of the profit of the firm as may be agreed upon by the partner .

Ø  The minor may have access to and inspect and copy any of the accounts of the firm.

Ø  The share of the minor in the profits and in the assets of the firm are liable for the acts of the firm but the minor is not personally liable for any such act.

ü  Company

Definition

The term company is used to describe an association of a number of person, formed for some common purpose and registered according to the law relating to companies . Section of the companies act 1956 states that a company means a company formed and registered under this act or an existing company.

 Essential Features of a Company

Ø  Registration : A company comes into existence only after registration under the companies Act but a satatutory corporation is formed and commerce business as notify or stated in the act and as passed in the legislature .

Ø  Voluntary Association : A company is an association of many person on a voluntary basis . Therefore a company is formed by the choose and consent of the members .

Ø  Legal personality : A company is regarded by law as a single person . It has a legal personality . This rule applies even in the case of one man company.

ü  Types of Company

Private Company

A private company is one which by its article  restricted the right of the members of transfer their share if any limits the number of its member to 50 and prohibits any invitation to the public to subscribe for bany share in or debenture of the company .

Public Company

 All companies other than private companies are called public company.Public company may be classified may be binto three types companies limited by share , companies limited by guarantee, unlimited companies .

     

The law relating to sell goods

Definitions: The lawrelating to the sale of movable goods is contained in the sale of goods Act (Act III of 1930). It closely follows the English Act on the subject.

Buyer: Buyer means a person who buys or agrees agree to buy goods. Sec-2 (1).

Seller: Seller means a person who sells or agrees to sell goods. Sec-2 (13).

* Transfer of Ownership

Sales of good involve transfer of ownership of property from the one seller to the buyer. It is necessary to determine the precise moment of time at which the ownership of goods passes from seller to buyer, because of the following reason.

1. Risk passes with property: The general rule is that risk passes with the property. If  the goods are lost or damaged by accident or otherwise, then, subject to certain exceptions, the loss falls on the person who is the owner at the time at the goods are lost or damaged.
2. Who can take action?: When there is danger of the goods being damaged by the action of third parties it is the owner who can take action.
3. What is the effect of insolvency: In case of insolvency of ether the buyer or seller it is necessary to know whether the goods will be taken over the official assignee. The answer depends upon whether the ownership of the goods is with the party who has become insolvent.

* Performance of the contract of sell:

Delivery: “Delivery means a voluntary transfer of profession from one person to another.” Sec- 2(2).

1. Actual delivery occurs when the goods themselves are delivered, the goods are physically handed over to the seller or to his agent.
2. Symbolic delivery occurs when the buyer gets the means of obtaining possession.
3. Consecutive delivery occurs when a change in the possession of the goods without any change in the actual and visible custody.

* Rules regarding to delivery

1. Position of buyer: Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the profession of the buyer or of any person authorized to hold them on his behalf. Sec(33)
2. Effect of part delivery: A delivery of par of goods, in progress of the delivery of the whole, has the same effect, for the purpose of passing the property in such goods.
3. Application for delivery: Apart from any express contract the seller of goods is not bound to deliver them until the buyer applies to delivery. Sec (35).
4. Time of delivery:  Where under the contract of sale the seller is bound to send the good to the buyer but no time for selling them is fixed, the seller is bound to send them within a reasonable time.
5. Express to delivery: Unless otherwise agreed, the express of and in identical to putting the goods in to a deliverable state shall be borne by the seller. Sec 36(5).

Workman’s Compensation Act, 1923

An Act to provide for the payment by certain classes of employees to their workmen of compensation for injury by accident.

* Preliminary

 Short title, extent and commencement: (1) This Act may be called the workmen’s compensation Act, 1923.

(2) It extends to the whole of Bangladesh.

(3) It shall come into force at on the first day of July, 1924.

Definitions.-  (1) In this Act, unless there is anything repugnant in the subject or context.-

(a)     Adult and minor mean respectively person who is not and a person who is under the age of fifteen years;

(b)     Commissioner means a Commissioner for workmen’s compensation appointed under section 20.

(c)     ‘Compensation’ means compensation as provided for by this Act.

(d)     ‘dependent’ means any of the following relatives of a deceased workman namely; a minor legitimate son, and unmarried legitimate daughter, or a widowed mother.    

* Employees liability for compensation 

1.       If personal injury is caused to a workman by accident arising out of and in the course to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions,

(a)     In respect of any injury which does not result in the total or partial disablement of the workmen for a period exceeding days.

(b)     In respect of any [injury, not resulting in death, caused by] an accident which is directly attributable to-

(i)                   If the workmen having been at the time thereof under the influence of drink or drugs.

(ii)                  The willful disobedience of the workmen to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workman

(iii)                The willful removal or disregard by the workman of any safety guard or other device which he know to have been provide for the purpose of securing the safety of workmen.

* Commissioners

If any question arises in any proceeding under this act as to the liability of any person to pay compensation (including any question as to whether a person is injured is or is not an workman) or as to the amount or duration of compensation (including any question as to the nature or extend of disablement) the question shall, in default of agreement, be settled by a commissioners.

Payment of Wages Act, 1936

 

    

An Act of regulate the payment of wages to certain classes of persons employed in industry.

Definitions:-

(i)                   “factory” means a factory as defined in clause [(f) of section 2 of the Factories Act, 1965]

(ii)                 “industrial establishment” means any

(a)     Motor omnibus service

(b)     Dock, wharf or jetty

(c)     Inland steam vessel as defined in the Inland Shipping ordinance, 1975.

(d)     Mine, quarry or oil-field

(e)     Plantation

(f)      Workshop or other establishment in which articles produced, adapted, or manufactured, with a view to their uses, transport or sale

(g)     Airlines

(h)     Any contractors establishment for the purpose of trade and business including the sub-contractors, concerning construction, re construction, repair, road, tunnel, drain, cannel or bridge or concerning carrying, loading or un loading of cargo.

(iii)                “Plantation” means any estate which is maintained for the purpose of growing cinchona, rubber, coffee or tea,and on which 25 or more persons are employed on that purpose.

(iv)               “prescribed” means prescribed by rules under this Act

(v)                 “Railway” administration” has the meaning assigned to it in clause (6) of section 3 of the Railway Act, 1890.

Responsibility of payment wages:-

Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act:

Provided that, in the case of persons employed (otherwise then by a contractor)-

(a)     In factories, if a person has been named as the manager of the factory under clause [(f) of sub-section (1) of section 6 of the factories Act, 1965]

(b)     In industrial establishments, if there is a person responsible to the employer for the supervision and control of the industrial establishment.

(c)     Upon railways (otherwise then in factories), if the employer is the railway administration has nominated a person in this behalf for the local area concerned, the person so named, the person so reasonable to the employer, or the person so nominated, as the case may be, shall be reasonable for such payment.

Fines:-

(1)     No fine shall be imposed on any employed person save in respect of such acts and omissions on his part as the employer, with the previous approval of the Government or of the prescribed authority may have specified by notice under sub-section (2).

(2)     A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which the employment is carried on or in the case of persons employed upon the railway at the prescribed place or places.

(3)     No fine shall be imposed on any employed person until he has been given an opportunity of showing cause against the fine, or otherwise than in accordance with such procedure as may be prescribed for the imposition of fines.

(4)     The total amount of fine which may be imposed in any one wage-period on any employed person shall not exceed an amount equal to in the taka of the wages payable to him in respect of the wage-period.

(5)     No fine shall be imposed on an employed person who is under the age of fifteen years.

Appeal:-

(1)     An appeal against a direction made under [sub-section (3) or subsection (4)] of section 15 may be preferred, within thirty days or  the date on which the direction was made before the [Labor Appellate tribunal]-

(a)     By the employer or other person responsible for the payment of wages to be paid by way of wages and compensation exceeds three hundred Taka, or

(b)     By an employed person, if the total amount of wages claimed to have been with held from him or from the unpaid group to which he belonged exceeds fifty taka, or

(c)     By any person directed to pay a penalty under [(sub-section (4) of section 15].

(d)     Save as provided in sub-section (3) or sub-section (4) of section 15 shall be final.

Bar of suits:-

No court shall entertain any suit for the recovery of wages or of any deduction from wages in so far as the sum so claimed-

(a)     Forms the subject to an application under section 15 which has been presented by the plaintiff and which is pending before the authority appointed under that section or an appeal under section 17

(b)     Has formed the subject of a direction under section 15 in favor of the plaintiff

(c)     Has been adjusted, in any proceeding under section 15, not to be owned to the plaintiff

(d)     Could have been recovered by any application under section 15.

             AN ASSIGNMENT

ON

BUS 301: LEGAL ASPECTS OF BUSINESS

(THE GLOSSERY ON THE WHOLE SYLLABUS)

PREPARED FOR

MD. MAMUN UR RASHID

LECTURER & COURSE TEACHER

DEPARTMENT OF BUSINESS ADMINISTRATION

PREPARED BY

NAME: SYED MEHEDI IMAM RIFAT

ID NO: 0820BBA00733

DEPARTMENT OF BUSINESS ADMINISTRATION

MANARAT INTERNATIONAL UNIVERSITY, DHAKA-1212

July, 2011

   

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