MAM4M BUSINESS REGULATORY FRAMEWORK Unit : I€¦ · · 2018-01-10TM . MAM4M - Business...

MAM4M BUSINESS

REGULATORY FRAMEWORK

Unit : I 1

TM

MAM4M - Business Regulatory Framework

SYLLABUS –UNIT I

• Brief outline of Indian Contracts Act • Special contracts Act • Sale of goods Act • Contract of Agency

2

CONTRACT - According to sec.2(h), a contract is defined as an agreement enforceable before the law.

AGREEMENT – According to sec.2(e), every promise or set of promises forming consideration for each other.

PROMISE - According to sec.2(b), when a person made a proposal to another to whom proposal is made, if proposal is assented there to.

MAM4M - Business Regulatory Framework 3

OFFER. According to Sec.2(a), when a person made a proposal, when he signifies to another his willingness to do or to abstain from doing something.

AGREEMENT = OFFER + ACCEPTANCE CONSENSUS - AD – IDEM- According to Sec.13, meeting of minds or identity of minds or receiving the same thing in same sense at same time.


4

ESSENTIAL ELEMENTS OF A VALID CONTRACT (Sec.10) 1.Offer & acceptance. 2.Intention to create legal relationship. 3.Consensus - ad - idem. 4.Consideration. 5.Capacity to contract. 6.Free consent. 7.Legality of object. 8.Possibility of performance. 9.Writing & registration.


TYPES OF CONTRACTS VALID CONTRACTS Absolute contract Contingent contract(Sec. 31-36) Express contract Implied/Quasi contract(Sec.68- 72)


Valid contract – If all the condition are fulfilled it is called as a valid contract.

Contingent contract – In a contract to do or not to do something, if an event is collateral, does or doesn't happen.

Express contract – When contracts are either in writing or in oral.

Implied contract – When contracts are neither in writing nor in oral.


INVALID CONTRACTS

• Void contract Is void(Void - ab - initio) Becomes void • Voidable contract Illegal contract • Unenforceable contract


Invalid contract – In a contact if any one condition is not fulfilled.

void (Void-ab-initio) – An agreement which is not valid from the beginnin

void An agreement which is valid in the beginning but due to some supervening impossibility the contract becomes void.


9

OTHER TYPES OF CONTRACTS

•Executed contract

•Executory contract

•Unilateral contract

•Bilateral contract


OFFER According to Sec.2(a), when a person made a proposal, when he

signifies to another his willingness to do or to abstain from doing something.


TYPES OF OFFER

Express offer Implied offer Specific offer General offer Cross offer Counter offer Standing offer


LEGAL RULES FOR OFFER Offer must be given with an intention to create a legal

relationship.(Balfour Vs. Balfour) Offer must be definite.(Taylor Vs. Portington) There is a clear cut difference between offer, invitation to offer,

invitation to sale. (Harris Vs. Nickerson) Offer must be communicated. (Fitch Vs. Snedkar)

Mere statement of price of price is not an offer.(Harvey Vs. Facey)


ACCEPTANCE

According to sec.2(b), when a person made a proposa another to whom proposal is made, if proposal is assented there to, it is called acceptance.


According to sec 2(d) consideration is defined as “when at the desire of the promisor , or promisee or any other person has done or abstained from doing or does or abstains from doing ,or promises to do or to abstain from doing , something , such an act or absinence or promise is called a consideration for the promise .

CONSIDERATION


LEGAL RULES AS TO CONSIDERATION

1)It must move at the desire of the promisor. [Durga Prasad v. Baldeo ] 2)It may move by the promisee . [Chinnaya v. Ramayya ] 3)It must be past ,present or future . 4)It need not be adequate . 5)It must be real . 6)It must not be illegal , immoral or opposed to public policy .

17 MAM4M - Business Regulatory Framework 17

Contract without consideration is void – Exceptions

Love & affection . [Venkataswamy v. Rangaswamy] Compensation for voluntary service . Promise to pay a time – barred debt . Completed gift . Agency sec (185) . Charity . Contract of bailment sec(148 ) .


Capacity to contract Following are the condition for a person to enter into

contract • He must be major • He must be sound mind • He must not be disqualified by any other law.


Disqualified persons to enter into a contract

a) Minor b) unsound person c)others i.e alien enemy, insolvent, convict,

company/corporation against MOA / AOA .


Essentials of undue influence

1. There are two persons 2. The relations are satisfying between them 3. One must dominate the other 4. There must be unfair advantage 5. It involves the moral pressure


There is an undue influence between the following persons: -Principal and agent -Superior and and subordinate - Doctor and patient - Father and son - Teacher and student - Promoter and company - Master servant - Spiritual advisor and devotee


MISTAKE

Mistake of fact

Of the country

Of the foreign country Bilateral mistake

Unilateral mistake

Mistake as to subject matter

Mistake as to possibility

As to person

As to nature

Physical impossibility Legal impossibility

existence identity quality quantity title price

Mistake of law


• If the object of an agreement is the performance of an unlawful act, the agreement is unenforceable.

• For a contract to be valid only if the object and the consideration should be legal.

• The word object means purpose or design.

UNLAWFUL OBJECT


Wager Contract (Sec 30) A wager contract is a contract in which one person promises to

another to pay money or money’s worth by the happening of an uncertain future event in consideration for other person’s promise to pay if the event does not happen.


Essential Elements of Wagering

• There are two persons. • There must be an uncertain future event. • No control over the event by both the parties. • There must be a reciprocal promise. • Others are not interested in the contract.


Example:

In a wrestling bout, A tells B that wrestler no.1 will win. B challenges the statement of A. They bet with each other over the result of the bout. This is a wagering agreement.


Contingent Contract(sec 31)

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. It is also called a conditional contract.


Essential Elements of a Contingent Contract: • There are two persons. • There must be an uncertain future event. • Some control over the event but not absolute control. • There is no reciprocal promise between the persons. • Others may be interested in the contract. • It is a valid contract.


Example:

• A contracts to pay B Rs.10,000 if B’s house is burnt. This is a contingent contract.


Differences Between a Wagering Agreement and a Contingent Agreement: • Wager agreement

• There is a reciprocal promise.

• It is a void contract. • Others are not interested

in the contract. • It is contingent in nature.

• Contingent agreement • There is no reciprocal

promise. • It is a valid contract. • Others are interested in the

contract. • It may not be wagering in

nature.


DISCHARGE OF A CONTRACT

DISCHARGE BY AGREEMENT OR CONSENT DISCHARGE BY PERFORMANCE DISCHARGE BY IMPOSSIBILITY OF PERFORMANCE DISCHARGE BY LAPSE OF TIME DISCHARGE BY OPERATION OF LAW DISHARGE BY BREACH OF CONTRACT


DISCHARGE BY OPERATION OF LAW MERGER INSOLVENCY UNAUTHORISED ALTERATION OF THE TERMS OF A

WRITTEN AGREEMENT DEATH RIGHTS & LIABILITIES VESTING IN THE SAME PERSON


33

DISCHARGE BY BREACH OFCONTRACT ACTUAL BREACH : At the time of performance During the performance

ANTICIPATORY BREACH By the act of promisor (implied repudation) By renunciation of obligation (express repudation)


34

REMEDIES OF INJURED PARTY

• A remedy is a means given by law for the enforcement of a right

• Following are the remedies • [1] Rescission of damages. • [2] Suit upon quantum meruit. • [3] Suit for specific performance. • [4] Suit for injunction.


INDEMNITY (Sec 124)

A contract by which one party promises to another to save him from loss caused to him by the conduct of the promisor himself , or by the conduct of any other person is called a contract of indemnity.


TYPES OF GUARANTEE

• SPECIFIC GUARANTEE : When a guarantee extends to a single transaction or debt it I

known as a specific or simple guarantee CONTINUING GUARANTEE : When a guarantee extends to a series of transactions It is called continuing guarantee


BAILMENT Sec 148

• The word Bailment is derived from the French word “ballier” which means “to deliver” .

• Bailment means delivery of goods by one person to another for some purpose ,upon a contract ,that they shall ,when the purpose is accomplished ,be returned or otherwise disposed of according to the instructions of the person delivering them. The person delivering the goods is called the ‘bailor’ and the person to whom they are delivered is called the ‘bailee’.


Duties and rights of Bailor and Bailee Duties of bailor. To disclose known faults. To bear extraordinary expenses of bailment. To indemnify bailee for loss in case of pre mature termination of

gratuitous bailment. To receive back the goods. To indemnify the bailee.


https://www.youtube.com/watch?v=dHYJKitT130

39



PLEDGE (SEC 172)

The bailment of goods as security for payment of a debt or performance of a promise is called “Pledge”.

The bailor in this case is called the “pledger” or “pawnor” and the bailee is called the “pledgee” or “pawnee”

Rights of Pawnee. Right of retainer. Right of retainer for subsequent advances. Right to extraordinary expenses. Right against true owner, when the Pawnor’s title is defective. Pawnee’s rights where pawnor makes default . MAM4M - Business Regulatory Framework 40

CREATION OF AGENCY • By express agreement • By implied agreement • Agency by estoppel • Agency by holding out • Agency by neccesity • Agency by ratification • Agency by operation of law

• http://study.com/academy/lesson/agency-relationship-definition-

principles-problems.html


http://study.com/academy/lesson/agency-relationship-definition-principles-problems.html

http://study.com/academy/lesson/agency-relationship-definition-principles-problems.html

Sale of Goods Act 1930

42

https://www.youtube.com/watch?v=il7BSjkebc8


https://www.youtube.com/watch?v=il7BSjkebc8

Distinction between sale and agreement to sell

43

S.No BASIS SALE AGREEMENT TO SELL

1. Transfer of ownership

Transfer of ownership of goods takes place immediately.

Transfer of ownership of goods takes place in future times.

2. Executed or Executory

It is an executed contract.

It is an executory contract because something remains to happen.

3. Conveyance of Property

Buyer gets the right to enjoy the goods against whole of the world. It creates jus in rem(Right against property)

Buyer does not get such right to enjoy the goods. It only creates jus in personam (Right against person)


Cont.

44

4. Transfer of Risk Transfer of risk* of loss of goods takes place immediately as the ownership is been transferred. As a result in case of destruction of goods, the loss shall be beared by the buyer. (Risk*-Risk follows ownership)

Transfer of risk of loss of goods does not takes place because the ownership is not transferred. As a result, in case of destruction of goods the loss shall be borne by the seller.


UNIT II Brief outline of Indian Companies

Act 1956.

GROUP 1


Features of Company

• Company • Nature of company • Types of companies • Private vs public company • Privileges of private company • Doctrine of constructive notice • Prospectus • Memorandum of association. • Article of association. • Cases


1 separate legal entity 2.Artificial person 3.Perpetual existence 4.Common seal 5.Limited liability 6.Capacity to sue or to be sued 7.Transferability of share

NATURE OF COMPANY


Private Vs Public Company

Private Company Public Company

Minimum paid up capital 1 Lac 5 Lacs

Minimum no of members 2 7

Maximum no of members 50 No limit

Minimum no of Directors 2 3

Transfer of Shares

Restricted AOA & requires the prior permission of Board of Directors

Shareholders can transfer shares freely


Private Vs Public Company ..Contd.. Private Company Public Company

Public Subscription

AOA prohibits any invitation to public to subscribe to its sharess & debentures

Can invite public to subscribe to its shares & debentures

Acceptance of public Deposits

AOA prohibits acceptance of deposits from public

Can acceptance of deposits from public

Commencement of Business

Immediately after Certificate of Incorporation

Only after getting the Certificate of commencement of Business

Issue of prospectus

Need not prepare or file 'Prospectus' or 'statement in lieu of prospectus' with registrar

Must prepare or file Prospectus with registrar


Private Vs Public Company…Contd..

Private Company Public Company

Statutory meeting Not required to hold

Must hold after one month and before 6 months from date of obtaining the Certificate of commencement of business

Provisions regarding directors

No Central Govt approval for appointing and reappointing of MD or Whole time director

Central Govt approval is must for appointing and reappointing of MD or Whole time director

Managerial remuneration

No restriction on payemnt of remuneration to directors & MD's

Remuneration is fixed at 11 % of net profits

Index of members Need not maintain index of members

Must maintain index of members if no of members exceed 50


UNIT III Brief outline of FEMA - Consumer

Protection Act


Consumer Protection Act • Enacted by the Parliament in 1986 • To provide for better protection of interest of consumers. • To make provisions for the establishment of Consumer Councils and

other authorities for the settlement of consumer disputes.

https://www.youtube.com/watch?v=yBwtdKLg-ng


https://www.youtube.com/watch?v=yBwtdKLg-ng

Who is a Consumer?

• Consumer is one who – Buys any goods for a consideration and includes a hire-

purchaser; – Any user of such goods for consideration but excludes one, who

obtains for re-sale or for commercial purposes; – Hires a service for consideration and includes a beneficiary of

such service, if availed of with the approval of the hirer.


54

FERA & FEMA

• Object to conserve and prevent misuse

• Violation was Criminal Offence and was non compoundable

• It was a draconian police law

• To facilitate external trade and payments

• Violation is a civil offence and is compoundable

• It is a civil law


https://www.youtube.com/watch?v=f-mkq7doMnY

54

The laws of Trade Marks Copyright Patents Designs Trade related Intellectual Property Rights (TRIPS) RTP IDRA -an overview

UNIT IV


Overlapping IP Protection

• Patents, Trademarks & Copyrights

– These IP rights are often confused. There are some similarities, but these IP rights are different and serve different purposes.

– But they need not be mutually exclusive. For any one work, more than one form of IP protection may apply, as long as it meets the requirements of the laws that govern that form of protection.

– https://www.youtube.com/watch?v=e9M-NrX8jx8


• Patents

– Patent protection is afforded to inventions and industrial designs (and even plants).

– A patent gives the inventor the exclusive right to exclude others from making, using, offering for sale or selling the invention.

– Different types of patents have different terms:

• Utility patents have a 20-year term.

• Design patents have a 14-year term.

Forms of Intellectual Protection


• Trademarks

– Trademark protection is afforded to words or designs that are used to distinguish the source of the goods or services from the goods or services of others.

– A trademark gives the owner the right to prevent others from using a confusing, similar mark.

– Trademark rights may continue indefinitely.



• Copyright

– Copyright protection is afforded to authors of “original works of authorship,” including literary, dramatic, musical, artistic and certain other intellectual works.

– A copyright gives the owner the exclusive right to do certain things, e.g., copy the work, adapt the work and distribute copies of the work.

– Copyright terms (for works created on or after January 1, 1978).

• Individual: life + 70 years

• Work made for hire: 95 years from publication or 120 years from creation



• An ornamental design may be protected by copyright as a work of art and also may be the subject of a design patent.

• Where a copyrighted artistic representation identifies a product or service, it also may be the subject of a trademark.

• In some instances, an industrial design can span patent, trademark and copyright protection.



• Depending on the features of the “intellectual property” in question, it may be covered by: – Patent protection

• Design 14 years, or • Utility 20 years.

– Copyright protection: • Life + 70, or • Works made for hire, 95 or 120.

– Trademark protection • Indefinite



• Patents, trademarks, copyright – OH MY!

– Different types of protection

– Different terms of protection

• Therefore, the “exclusive” use of the creation/invention may be extended if:

– It spans; or

– Is made to span more than one type of IP.



• In 1915, Alexander Samuelson and Earl R. Dean designed the original "hobble skirt" contour bottle.

• The first design patent on the bottle, D63,657, was granted on December 26, 1923, to the bottle manufacturer.

Overlapping IP Protection: The Coca-Cola Contour Bottle


• Trademark: Bottle, COCA-COLA, COKE

• Copyright: Bottle, keychain, advertising

• Trade secret: The formula

(SHHH! It’s a secret!)

• Right of publicity: Use of sports figures

Other IP Rights in Play: The Coca-Cola Product


WTO TRIPS Agreement

• It is the GATT Uruguay Round Agreement on “Trade Related Intellectual Property”.

• It deals with the protection & enforcement of “Trade-Related” intellectual property “rights”.

• It establishes minimum levels of protection that each government has to give to the intellectual property of fellow WTO members


“Literary & Artistic Works” * They are books, paintings, musical compositions, plays, operas, movies, radio/tv programs, performances, & other

artistic works.

How are they Protected? * Protected by “Copyright” which provides the individual “author” or

“artist” the exclusive right to do certain things with an “original work”, including the right to reproduce, publish, perform the work in public, & to make adaptations of it & benefit thereby.


Patent

• Patent is the right given to inventors to have protected exclusive use

for specified period of time (“term”) for making, using, or selling a

new, useful, non-obvious invention.

• Patents are available for both products & processes.

• Patent in the law is a property right and hence, can be gifted,

inherited, assigned, sold or licensed


TRIPS : Main Provisions on Patents

Section 5, Part II contains the following standards:

• 1) Patents shall be granted for any inventions, provided they are new,

& are capable of industrial application.

• 2) Patents shall be granted in all fields of technology.

• 3) Members can exclude from patentability diagnostic, therapeutic, &

surgical methods of treatment for humans or animals, as well as

plants & animals & biological process for the production thereof.


TRIPS : Main Provisions on Patents

• 4) Plant varieties shall be protected by patents.

• 5) Exclusive rights conferred in the case of product and process

patents are defined, subject in the case of imports.

• 6) Inventions shall be disclosed in a manner which is sufficiently clear

& complete for a skilled person in the art to carry out the invention.

• 7) Limited exceptions to the exclusive rights can be defined by

national laws (TRIPS Art. 30)


Copyright

• Copyright is the exclusive right to do certain things with an original

work, including the right to reproduce, publish, perform the work in

public, & to make adaptations of it.

• Copyright is a right, which is available for creating an original literary

or dramatic or musical or artistic work.

• include Cinematographic films and Computer programs and software


TRIPS: Main Provisions on Copyright • 1) Protection of works covered by the Berne Convention excluding moral

rights to the expression

• 2) Protection of computer programs as literary works & of compilations of

data.

• 3) Recognition of rental rights, at least for phonograms, computer

programs, & for cinematographic works.


TRIPS: Main Provisions on Copyright

• 4) Exceptions to exclusive rights must be limited to special cases

which do not conflict with normal exploitation of the work & do not

unreasonably prejudice the legitimate interests of the rights-holder.

• 5) Recognition of the 50 year minimum exclusivity term for works

• 6) Recognition of rights of performers, producers of phonograms, &

broadcasting organizations


*Trademark – consists of any sign, or combination of signs, capable of distinguishing

the goods or services of one person from those of another, including personal names, designs, letters, numerals, colours, figurative elements, shape of goods, or their packaging. TMs include service marks, collective marks, & mayinclude certification marks.

*Trade Secrets – are information deriving its value from not beingknown or available to

the public competitors, or other parties who might otherwise gain benefit from its disclosure or use.


*Geographical Indications – (sometimes called appellations of origin) are any indication that

identifies a product as originating in the territory of a Member, or a region or locality therein, for reason of which a particular quality, reputation, or other characteristic of the product is essentially attributable to geographical origin.

*Industrial Design – is the shape, configuration, pattern or ornamentation of a useful article

but not a method or principle of construction


UNIT V

Brief outline of Cyber Laws


INTRODUCTION

• GROWTH OF CYBER SPACE

• ONSET OF INTERNET

• CYBER LAW OR LAW OF INTERNET

• https://www.youtube.com/watch?v=Sur0qrM7-vM


http://images.google.co.in/imgres?imgurl=http://us.i1.yimg.com/us.yimg.com/i/fi/b_online.gif&imgrefurl=http://in.tech.yahoo.com/051021/137/60ohq.html&h=42&w=42&sz=1&hl=en&start=34&um=1&tbnid=8GvnQrB5HSy5fM:&tbnh=42&tbnw=42&prev=/images?q=google+images+on+cyber+crimes&start=21&svnum=10&um=1&hl=en&cr=countryIN&sa=N

NEED FOR CYBER LAWS

• Tackling cyber

crimes

• Intellectual property rights and copyrights protection act


http://images.google.co.in/imgres?imgurl=http://www1.istockphoto.com/file_thumbview_approve/1806794/2/istockphoto_1806794_cyber_theft.jpg&imgrefurl=http://www.istockphoto.com/file_closeup/?id=1806794&refnum=566747&h=380&w=380&sz=41&hl=en&start=48&um=1&tbnid=b8kuTOkGQfXoZM:&tbnh=123&tbnw=123&prev=/images?q=cyber+laws&start=40&ndsp=20&svnum=10&um=1&hl=en&sa=N

CYBER LAWS IN INDIA

• ITACT PASSED IN 2000

• INTERNET IN INDIA

• IMPLEMENTATION OF

CYBER LAW

• REASONS FOR DELAY IN

IMPLEMENTATION OF

CYBER LAWS IN INDIA


http://images.google.co.in/imgres?imgurl=http://cyberlaws.net/cyberindia/indiaindex1_files/logo.jpg&imgrefurl=http://cyberlaws.net/cyberindia/column.htm&h=72&w=420&sz=19&hl=en&start=11&um=1&tbnid=mOR67jQ9Yqi3nM:&tbnh=21&tbnw=125&prev=/images?q=google+images+on+cyber+laws&svnum=10&um=1&hl=en&cr=countryIN&sa=N

IT ACT PROVISIONS

• email would now be a valid and legal form of communication in our country that can be duly produced and approved in a court of law.

• Companies shall now be able to carry out electronic commerce using the legal infrastructure provided by the Act.

• Digital signatures have been given legal validity and sanction in the Act.


OFFENCES AND LAWS IN CYBER SPACE

• TAMPERING WITH COMPUTER DOCUMENTS

• HACKING WITH COMPUTER SYSTEM

• PUBLISHING OBSCENE MATERIAL ON INTERNET

• BREACHING OF CONFIDENTIALITY AND PRIVACY


http://images.google.co.in/imgres?imgurl=http://www.missingpersons.gov.au/__data/assets/image/5881/hack.jpg&imgrefurl=http://www.missingpersons.gov.au/media/publications/platypus_magazine/march_2000/intfrd.html&h=424&w=567&sz=76&hl=en&start=22&um=1&tbnid=6kLYQiHLmC2K5M:&tbnh=100&tbnw=134&prev=/images?q=CYBER+CRIMES+GRAPHS&start=20&ndsp=20&svnum=10&um=1&hl=en&sa=N

CYBER LAWS AMENDMENTS

• INDIAN PENAL CODE,1860

• INDIAN EVIDENCE ACT,1872

• BANKER’S BOOK EVIDENCE ACT,1891

• GENERAL CLAUSES ACT,1897


MAM4M BUSINESS REGULATORY FRAMEWORK Unit : I€¦ · · 2018-01-10TM . MAM4M - Business...

Documents

Transcript of MAM4M BUSINESS REGULATORY FRAMEWORK Unit : I€¦ · · 2018-01-10TM . MAM4M - Business...