legal aspects of business notes

8/11/2019 Legal Aspects of Business Notes

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WHAT IS CONTRACT?

Section 2 (h) defines a contract as an agreement enforceable by law. Thus to make a contractthere must be:

1. An agreement

2.

The agreement shall be enforceable by law.

Therefore we can say that as all agreements are not enforceable by law and therefore, all

agreements are not contracts.

According to Section 2(e) an agreement is defined as everypromise and every set of promises

forming the consideration for each other.

In an agreement there is a promise from both the sides. For example, A promises to deliver his

radio to B and in return B promises to pay a sum of Rs. 500 to A , there is said to be an agreement

between A and B

ESSENTIALS OF A CONTRACT:

1.

The agreement should be between two parties. An agreement is the result of a proposal orxxxoffer by one party followed by its acceptance by the other.2.

The agreement should be between the parties who are competent to contract.3. There should be a lawful consideration and lawful object in respect of that agreement.4.

There should be free consent of the parties, when they enter into the agreement.5.

The agreement must not be one, which has been declared to be void.

Competency:

One of the essentials of a valid contract, mentioned in section 10, is that the parties to the contract

should be competent to make the contract. According to section 11 :

Every person is competent to contract who is of age of majority according to law to which

he is subject, and who is of sound mind, and is not disqualified from contracting by any law to

which he is subject.

It means that the following three categories of persons are not competent to contract.

1.

A person who has not attained the age of majority, i.e., one who is minor.

2.

A person who is of unsound mind

3. A person who has been disqualified from contracting by some law.


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Although the above mentioned categories of persons are not competent to contract, yet

they may sometimes be making some bargains, taking some loans, or be supplied with some goods

by third parties, or be conferred with some benefits etc., the position of such person in such like

situations is being discussed below.

Consent:

One of the essentials of a valid contract mentioned in Section 10 is that the parties should

enter into contract with free consent. According to Section 14, Consent is said to be free when it is

not caused by

1.

coercion, as defined in Section 15, or

2.

undue influence, as defined in section16, or

3.

fraud, as defined in Section 17, or

4. misrepresentation as defined in Section 18, or

5.

mistake, subject to the provisions of Section 20, 21 and 22

Consent is said to be caused when it would not have been given but for the existence of such

coercion, undue influence, fraud, misrepresentation or mistake.

If the consent of one of the parties is not free consent, i.e., it has been caused by one or other of

the above stated factors the contract is not a valid one. When consent to an agreement is caused

by fraud, coercion, misrepresentation or undue influence, the agreement is a contract voidable at

the option of the party whose consent was so caused. If, however, the consent is caused by mistake

the agreement is void.

Consideration:

Presence of consideration is one of the essentials of a valid contract. Subject to certain exceptions,the general rule in India is that an agreement without consideration is void.

Consideration means something in return for the promise. It may be either some benefit conferred

on one party or some detriment suffered by the other.

In the words of Lush J. In Curie Vs. Misa (1875)

A valuable consideration in the sense of the law may consist either in some right, interest, profit or

benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered

or undertaken by the other.


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DISCHARGE OF CONTRACT

When an agreement, which was binding on the parties to it, ceases to bind them, the contact

is said to be discharged. A contract may be discharged in the following ways:

1. By Performance of the contract ;

Under a contract each party is bound to perform his part of the obligation. After the parties have

made due performance of the contract, their liability under the contract comes to an end. In such

a case the contract is said to be discharged by performance.

2.

By breach of the contract ;

When a party having a duty to perform a contract fails to do that, or does an act whereby the

performance of the contract by him becomes impossible, or he refuses to perform the contract,

there is said to be a breach of contract on his part. On the breach of contract by one party, the

other party is discharged from his obligation to perform his part of the obligation, and he also gets a

right to sue the party making the breach of contract for damages for the loss occasioned to him

due to the breach of contract. The breach of contract may be either actual, i.e., non-performanceof the contract on the due date of performance, or anticipatory, i.e., before the due date of

performance has come. For example, A is to supply certain goods to B on 1st January. On 1st

January A does not supply the goods. He has made actual breach of contract. On the other hand,

if A informs B on 1st December that he will not perform the contract on 1st January next, A has

made anticipatory breach of contract

3.

By impossibility of performance ;

Section 56, which deals with this question, mentions two kinds of impossibility.

Firstly, impossibility existing at the time of the making of the contract.

An agreement to do an act impossible in itself is void. The object of making any contract is that the

parties to it would perform their respective promises. If a contract is impossible of being performed,

the parties to it will never be able to fulfil their object, and hence such an agreement is void. For

example, A agrees with B to discover treasure by magic. The performance of the agreement being

impossible, the agreement is void. Similarly, an agreement to bring a dead man to life is also void.

Secondly, a contract which is possible of performance and lawful when made, but the same

becomes impossible or unlawful thereafter due to some supervening event.


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The performance of the contract may be possible when the contract is entered into but because

of some event, which the promisor could not prevent, the performance may become impossible orunlawful. Section 56 makes the following provision regarding the validity of such contracts:

A contract to do an act which after the contract is made, becomes impossible, or by reason of

some event which the promisor could not prevent, unlawful, becomes void when the act, becomes

impossible or unlawful.

4. By Agreement and Novation

Section 62 and 63 deals with contracts in which the obligation of the parties to it may end byconsent of the parties.

Novation

Novation means substitution of an existing contract with a new one. When, by an agreement

between the parties to a contract, a new contract replaces an existing one, the already existing

contract is thereby discharged, and in its pace the obligation of the parties in respect of the new

contract comes into existence. Section 62 contains the following provision in this regard:

Law:

Law is, generally, a system of rules which are enforced through social institutions to govern

behaviour. Laws can be made by legislatures through legislation (resulting in statutes), the

executive through decrees and regulations, or judges through binding precedents (normally in

common law jurisdictions). Private individuals can create legally binding contracts, including (in

some jurisdictions) arbitration agreements that may elect to accept alternative arbitration to the

normal court process. The formation of laws themselves may be influenced by a constitution

(written or unwritten) and the rights encoded therein. The law shapes politics, economics, and

society in various ways and serves as a mediator of relations between people.

Blackstone says Law in its general and comprehensive sense, signifies a rule of action, and is

applied indiscriminately to all kinds of actions, whether animate or inanimate, rational or irrational.

Thus we say laws of gravitation, laws of nature and law of nations.


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Salmond says Law is the body of principles recognized and applied by the State in the

administration of justice.

SOURCES OF LAW

Sources of Law are

1.

Primary Source and

2. Secondary Source

Primary Source

Primary source of Law is in the enactment passed by the Parliament or State Legislature.

Secondary Source

Secondary Source of Law is the judgments of the Supreme Court and High Courts and the

specialized tribunals. The Constitution of India provides that the law declared by the Supreme Court

shall be binding on all courts of India.

WHAT HAPPENS WHEN A PARTY TO A CONTRACT DIE?


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DIFFERENCE BETWEEN PROCEDURAL AND SUBSTANTIAL LAW?

Procedural lawcomprises the set of rules that govern the proceedings of the court in criminallawsuits as well as civil and administrative proceedings. The court needs to conform to thestandards setup by procedural law, while during the proceedings. These rules ensure fair practiceand consistency in the "due process".

Substantive lawis astatutory law that deals with the legal relationship between people or thepeople and the state. Therefore, substantive law defines the rights and duties of the people, butprocedural law lays down the rules with the help of which they are enforced. The differencesbetween the two need to be studied in greater detail, for better understanding.

Comparison chart

Procedural Law Substantive Law

Definition

Deals with and lays down the

ways and means by which

substantive law can be enforced

Deals with those areas of law which

establish the rights and obligations of

individuals , what individuals may or may

not do

Powers No independent powers Independent powers to decide the fate of
http://en.wikipedia.org/wiki/Due_processhttp://www.diffen.com/difference/Common_Law_vs_Statutory_Lawhttp://www.diffen.com/difference/Common_Law_vs_Statutory_Lawhttp://en.wikipedia.org/wiki/Due_process


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Procedural Law Substantive Law

a case

Application Can be applied in non legalcontexts

Cannot be applied in non legal contexts

RegulationBy statutory law By Act of Parliament or government

implementation

CAVEAT EMPTOR RULE

While purchasing goods buyer must be very careful, at his own interest, buyer has to select suchgoods only which are not of defective nature. In case where buyer, negligently purchasesdefective goods, he cannot repudiate the contract of sale. It is caveat emptor rule.

EXCEPTIONS FOR CAVEAT EMPTOR RULE

The shelter of caveat emptor rule is not available to shelter on the following occasions; When

caveat emptor is not applicable buyer can repudiate the contract.

When Sale is need by means of description:When goods are sold on the basis of description, thedelivered goods must be in accordance with description. If it is not so, sellers fraudulent behavior

can be observed and there is no ground to say that buyer is negligent. Then caveat emptor rule isnot applicable and buyer can repudiate the contract.

A case on this point is Vorley Vs Whipp. In this case, there is a sale between A and B according to

which A has to sell his harvester to B. While selling A gives a lot of description about the machine.

There after B comes to know that the delivered machine is not in accordance with givendescription. B Sues for repudiation of contract of sale. Court decides that as delivered goods are

not in accordance with given description, caveat emptor rule is not applicable and hence buyer

can repudiate the contract.

When sale is made by means of sample:When goods are sold on the basis of sample, the delivered

goods must be in resemblance with sample. Otherwise seller cannot claim the shelter of caveat

emptor rule.

Related case is Wallis Vs Prat. In this case a contract of sale gets formed between A and B

according to which A has to supply English sain fain seeds. The contract is based on samples. But A

supplies giant sain fain seeds. Court decides that buyer can repudiate the contract of Sale.


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When purpose is mentioned:at the time of purchasing the goods if buyer communicates the

purpose for the sake of which he is purchasing the goods seller should sell such goods only which

are suitable to that purpose otherwise caveat emptor rule is not applicable.

A case on the point is Priest Vs Laste. In this case, B purchases a bottle from A. At the time of

purchasing the bottle the buyer says that it should be qualified for storage of hot water. Thus herepurpose is mentioned but the seller sells such a bottle which is not qualified for storage of hot water.

As a consequence buyers wife gets injured. Court decides that buyer can claim compensation.

When concealment is made: In case where buyer conceals material facts and thus fraudulently

sells goods, then also caveat emptor rule is not applicable.

A case on this point is Smith Vs Green. In this case a contract of sale gets formed between A and B

according to which A has to sell an animal to B out of his (A`s) farm. B selects an animal and

requests A to confirm that there is no any sickness to that animal. Actually the animal has been

suffering from some sickness and A conceals the fact. There after it comes across death and court

decides that B can get the amount back.

When mis-representation is made:When seller sells the goods by giving mis-representation, he

cannot claim the protection of caveat emptor rule. Hence buyer can repudiate the contract.

Under first point Vorley Vs Whipp is explained. In the same case mis-representation or wrong

description can be seen in connection with Harvester.

DUTIES OF AGENTS

1.

Agent should follow the instructions given by the principal.

2.

If agent comes across any complicated situation, he has to communicate that situation to

principal and his advice is to be obtained.

3.

Agent should behave in his capacity as agent; he should not run the transaction in his own

name.

4. Agent should not make secret profits by utilizing reputation of the principal.

5.

Agent should safe guard property of principal particularly upon happening of events like deathof principal, insolvency of principal, etc.

6. Agent should maintain proper accounting records to enrol the transactions run by him. Agent

has to remit amounts to principal properly.

7. Agent has to remit amounts to principal properly.

8.

Agent should not carry on delegation.


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IMP LEGAL TERMS AND MAXIMS FROM LAW DICTIONARY

Actori Incumbit Onus Probandi : The burden of proof lies on the Plaintiff.

Del Credere Agent: In ordinary cases the only function of an agent is to affect a contract

between the principal and third party. The agent then drops out. But where an agent undertakes

on the payment of some extra commission to be liable to the principal for the failure of the third

party to perform the contract, he is called del credere agent and his extra commission for the

guarantee is called del credere commission.Alibi: Elsewhere. Plea of alibi means the defence taken by the accused that he was elsewhere

when the offence was committed.

Amicus curiae: Friend of the court; a person, not a party to the litigation, who volunteers advice

to the court which it might have overlooked; an advocate appointed by the State to defend a

poor accused.Bona vacantia: Goods without apparent owner hence belonging to the State. E.g. wild animals;

Certiorari: A writ issued by a superior court to an inferior court calling for the record for review

especially when the inferior court has acted without or beyond jurisdiction. It is issued by the

Supreme Court under Article 32 and by a High Court under Article 226 of the Constitution of India.

Cognizable offence: A case in, or an offence for, which a police officer may arrest a person

without a warrant.

Damnum Sine injuria: Damage without legal injury.

Epilogue: A concluding part added to a literary work.

Heabeas Corpus ad respondendum: a writ for producing a detenu before a court for trial on

another charge.

Heabeas Corpus ad Subjiciendum: A writ for securing the liberty of a detenu.

Heabeas Corpus ad testificandum: A writ for producing a detenu before a court for giving

evidence.

Injuria sine damnum: Injury without damage.

Quid pro quo: Something for something.

Sine die: Without deciding the date for resuming the hearing.

Ultra vires: Beyond the ambit, authority, power or scope.

Writ: A formal order under seal, issued in the name of a sovereign, government, court or other

authority, enjoining the officer or other person to whom it is to do or refrain from doing from somespecified act.

Writ of Habeas corpus: A writ requiring that a person is brought before court.

Writ of Mandamus: A writ commanding that a specified thing is done.

Writ of prohibition: A writ commanding that a specified thing is not done.

Writ of Quo warranto: A writ calling upon a person to show by what authority he claims an office.

Writ of Certiorari: A writ calling up the records of a proceeding in a lower court for review.

PARTNERSHIP ACT


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The Indian Partnership Act, 1932is an act enacted by the Parliament of India to regulatepartnership firms in India. It received the assent of the Governor-General on 8 April 1932and came into force on 1 October 1932. Before the enactment of this act, partnershipswere governed by the provisions of the Indian Contract Act. The act is administeredthrough the Ministry of Corporate Affairs. The act is not applicable to Limited Liability

Partnerships, since they are governed by the Limited liability Partnership Act, 2008.

THE term partneer is defined under section 4 of "Indian partnership act 1932 as under"partnership is an agreement between two or more persons who have agreed to shareprofits and loses of the business carried on by all or anyone of them acting upon all"

Section 2 of the act defines,

(a) An "act of a firm" means any act or omission by all the partners, or by any partner oragent of the firm which gives rise to a right enforceable by or against the firm;

(b) "Business" includes every trade, occupation and profession;

(c) "prescribed" means prescribed by rules made under this Act; (c-1) "Registrar" meansthe Registrar of Firms appointed under sub-section (1) of section 57 and includes theDeputy Registrar of Firms and Assistant Registrar of Firms appointed under sub-section (2)of that section;

(d) "Third party" used in relation to a firm or to a partner therein means any person who isnot a partner in the firm;

(e) Expressions used but not defined in this Act and defined in the Indian Contract Act,1872, shall have the meanings assigned to them in that Act

Partnership refers to an agreement between persons to share their profits or losses arisingon account of actions carried by all or one of them acting on behalf of all. The personswho have entered such an agreement are called partners and give their collectivebusiness a name, which is necessarily their firm-name. This relation between partners arisesout of a contract or an agreement, which means a husband and wife carrying on abusiness or members of a Hindu undivided family re not into partnership. The share of

profits received by any individual from the firm, money received by a lender of money,salary received by a worker or a servant, annuity received by a widow or a child of adeceased partner, does not make them a partner of the firm.

The Partnership Deed contains the mutual rights, duties and obligations of the partners, incertain cases; the Partnership Act also makes a mandatory provision as regards to therights and obligations of partners. When there is no Deed or the Deed is silent on anypoint, rights and obligations as provided in the Partnership Act shall apply.


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RIGHTS OF A PARTNER:

The rights of a partner are as follows:

i. Right of the partner to take part in the day-to-day management of the firm.

ii. Right to be consulted and heard while taking any decision regarding the business.

iii. Right of access to books of accounts and call for the copy of the same.

iv. Right to share the profits equally or as agreed upon by the partners.

v. Right to get interest on capital contributed by the partners to the firm.

vi. Right to avail interest on advances paid by the partners for business purpose.

vii. Right to be indemnified in respect of payment made or liabilities incurred or forprotecting the firm from losses.

viii. Right to the use of partnership property exclusively for partnership business only nothimself.

ix. Right as agent of the firm and implied authority to bind the firm for any act done incarrying the business.

x. Right to prevent admission of new partners/expulsion of existing partners.

xi. Right to continue unless and otherwise he himself cease to become partner.

xii. Right to retire with the consent of other partners and according to the terms-andconditions of deed.

xiii. Right of outgoing partner/legal heirs of deceased partner.

2. DUTIES OF A PARTNER:

The duties of a partner are as follows:

i. To carry on the business to the greatest common advantage:


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Every partner is bound to carry on the business of the firm to the greatest commonadvantage. In other words, the partner must use his knowledge and skill in the conduct ofbusiness to secure maximum benefits for the firm.

ii. To be just and faithful to each other:

Every partner must be just and faithful to other partners of the firm. Every partner mustobserve utmost good faith and fairness towards other partners in business activity.

iii. To render true accounts:

Every partner must render true and proper accounts I his co-partners. Each and everyentry in the books must be supported by vouchers and the explanations if demanded byother partners.

iv. To provide full information:

Every partner must provide full information of activities affecting the firm to the other co-partners. No information should be concealed, kept secret.

v. To attend diligently to his duties:

Every partner is bound to attend diligently to duties in the conduct of the business of thefirm.

vi. To work without remuneration:

A partner is not entitled to receive any kind remuneration for taking part in the conduct ofthe business. But in practice, the working partners are generally paid remuneration as peragreement, so also commission in some case.

vii. To indemnify for loss caused by fraud or will-full neglect:

If any loss is caused to the firm because of a partner's will-full neglect in the conduct ofthe business or fraud commit by him against a third party then such partner mustindemnify the firm for the loss.

viii. To hold and use partnership property exclusively for the firm:

The partners must hold and use the partnership property exclusively for the purpose ofbusiness of the firm not for their personal benefit.

ix. To account for personal profits:

If a partner derives any personal profit from partnership transactions or from the use of theproperty of the firm or business connection the firm or the firm's name, he must account

for such profit and pay it to the firm.


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x. Not to carry on any competing business:

A partner must not carry on competing business to that of the firm. If he carries on andearns any profit then he must account for the profit made and pay it to the firm.

xi. To share losses:

It is the duty of the partners to bear the losses of the firm. 'Partners share the losses equallywhen there is no agreement or as per their profit share ratio.

xii. To act within authority:

Every partner is bound to act within the scope of authority. If he exceeds his authority andthe firm suffers from any loss, he shall have compensated the firm for such loss.

xiii. Duty to be liable jointly and severally:

Every partner is jointly and individual liable to the third parties for all acts of the firm donewhile he is a partner.

xiv. Duty not to assign his interest:

A partner cannot assign or transfer his partner interest to an outsider so as to make him thepartner of the firm without the consent of other partners. However, he can assign his shareof the profit and his share in the assets the firm where the assignee shall not be entitled to

interfere in the conduct of the business

3.LIABILITIES OF A PARTNER TO THIRD PARTIES:

The following are the liabilities of a partner to third parties:

i. Liability of a partner for acts of the firm:

Every partner is jointly and severally liable for all acts of the firm done while he is a partner.Because of this liability, the creditor of the firm can sue all the partners jointly orindividually.

ii. Liability of the firm for wrongful act of a partner:

If any loss or injury is caused to any third party or any penalty is imposed because ofwrongful act or omission of a partner, the firm is liable to the same extent as the partner.However, the partner must act in the ordinary course of business of the firm or with

authority of his partners.


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iii. Liability of the firm for mis-utilisation by partners:

Where a partner acting within his apparent authority receives money or property from athird party and mis-utilises it or a firm receives money or property from a third party in thecourse of its business and any of the partners mis-utilises such money or property, then the

firm is liable to make good the loss.

iv. Liability of an incoming partner:

An incoming partner is liable for the debts and acts of the firm from the date of hisadmission into the firm. However, the incoming partner may agree to be liable for debtsprior to his admission. Such agreeing will not empower the prior creditor to sue theincoming partner. He will be liable only to the other co-partners.

v. Liability of a retiring partner:

A retiring partner is liable for the acts of the firm done before his retirement. But a retiringpartner may not be liable for the debts incurred before his retirement if an agreement isreached between the third parties and the remaining partners of the firm discharging theretiring partner from all liabilities. After retirement the retiring partner shall be liable unless apublic notice of his retirement is given. No such notice is required in case of retirement ofa sleeping or dormant partner.

EXTRA READING MATERIAL:

Writs:

Writ of Prohibition:A writ of prohibition is issued primarily to prevent an inferior court from exceeding its jurisdiction, or

acting contrary to the rule of natural justice, for example, to restrain a Judge from hearing a case in

which he is personally interested.

The term inferior courts comprehends special tribunals, commissions, magistrates and officers who

exercise judicial powers, affecting the property or rights of the citizen and act in a summary way or

in a new course different from the common law. It is well established that the writ lies only against a

body exercising public functions of a judicial or quasi- judicial character and cannot in the nature

of things be utilised to restrain legislative powers.


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These Writs are issued as alternative or peremptory. An alternative Writ directs the recipient to

immediately act, or desist, and Show Cause why the directive should not be made permanent. A

peremptory Writ directs the recipient to immediately act, or desist, and return the Writ, with

certification of its compliance, within a certain time.

The writ can be issued only when the proceedings are pending in a court if the proceeding has

matured into decision, writ will not lie.

Writ of Certiorari

It is a writ (order) of a higher court to a lower court to send all the documents in a case to it so the

higher court can review the lower courts decision. Appellate review of a case that is granted by

the issuance of certiorari is sometimes called an appeal, although such review is at the discretion of

the appellate court. A party, the petitioner, files a petition for certiorari with the appellate court

after a judgment has been rendered against him in the inferior court.

However, unlike a writ of prohibition, superior courts issue writs of certiorari to review decisions which

inferior courts have already made. The writ of prohibition is the counterpart of the writ to certiorari

which too is issued against the action of an inferior court. The difference between the two was

explained by Justice Venkatarama Ayyar of the Supreme Court in the following terms:

When an inferior court takes up for hearing a matterover which it has no jurisdiction, the person

against whom the proceedings are taken can move the superior court for a writ of prohibition and

on that an order will issue forbidding the inferior court from continuing the proceedings.

On the other hand, if the court hears the cause or matter and gives a decision, the party aggrieved

would have to move the superior court for a writ of certiorari and on that an order will be made

quashing the decision on the ground of want of jurisdiction.

Writ of Mandamus

A writ of mandamus is an order issued by a superior court to a lower court or other entity

commanding the lower court, corporation or public authority to perform or not perform specific

acts. Rules applying to a mandamus include: The requested act must be used as a judicial remedy.

The act must conform to statutorily-authorized provisions. The write must be judicially enforceable

and protect a legal right. Three types of mandamus are utilized, depending upon the legal

circumstances.

The alternative mandamus demands a defendant to appear before court, perform an act

or show cause for not having done so.

The peremptory mandamus is used when a defendant fails to comply with an alternative

mandamus and which is an absolute command for performance.

Third, the continuing mandamus requests an officer or authority to perform its activities

expeditiously for an indefinite period of time in order to prevent a miscarriage of justice.

(Practical example is the case of the Kanchi Shankaracharya who got entangled in a criminal

case. Looks like the police froze the accounts of the trust he runs and subsequently, the writmandamus was filed and upheld by the Chennai High Court.)


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Writ of Quo Warranto

The meaning of the term Quo Warranto is by what authority. The writ of quo warranto may be

issued against a person holding a public office or governmental privilege. The issue of summon is

followed by legal proceedings, during which an individuals right to hold an office or governmentalprivilege is challenged.

The writ requires the concerned person to explain to the Court by what authority he holds the

office. If a person has usurped a public office, the Court may direct him not to carry out any

activities in the office or may announce the office to be vacant. The writ is issued by the Court after

reviewing the circumstances of the case. There are a few conditions which must be fulfilled for the

grant of the writ of quo warranto India:

The concerned office must be a government unit or public office which performs public duties.

Examples of such office members are advocate general, university officials, members of amunicipal board.

The public office must have a real existence. It should be permanent and cannot be terminated.

A person against whom the writ of quo warranto is issued must have the real possession of the

public office.

The writ shall be issued only when the public office is held by a particular person in an illegal

manner

Habeas Corpus

It is an extraordinary remedy at law. Habeas corpus in Latin means May you have the body) is

a writ (legal action) which requires a person under arrest to be brought before a judge or into court.This ensures that a prisoner can be released from unlawful detentionthat is, detention lacking

sufficient cause or evidence. The remedy can be sought by the prisoner or by another person

coming to the prisoners aid. This right originated in theEnglish legal system, and is now available in

many nations. These Writs are filed nearly every day in nearly every jurisdiction.

JUSTICE

The properadministration of the law, the fair and equitable treatment of all individuals under thelaw is defined as Justice.

Law has always been the agreed upon rules by which a society abides. While opinions uponwhether or not a law is right will vary, there is a general consensus in the just nature of laws. If thisconsensus is not met, the law is repealed, as was shown in the United States during prohibition. Thedifficulty here resides in a population with desires that are not just, and laws that reflect that.

Justice, on the other hand, is a very abstract concept. Like law, it is a form of social order derivedfrom a mandate from the masses. There is no actual correct definition of justice, but rather it is an


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agreed upon way of behaving. It means to be fair and true to each other, and to let personalpolitics stay out of the way of what is truly best for the society as a whole. This is a wonderfultheory, but seems to be slightly more difficult when applied to a society.

Lalman Shukla v. Gauri Datt

Allahabad High Court (1913) 11 ALJ 489

The facts of the case are these: In January last the nephew of the defendant abscondedfrom home and no trace of him was found. The defendant sent his servants to differentplaces in search of the boy and among them was the plaintiff who was the munim of hisfirm. He was sent to Hardwar and money was given to him for his railway fare and otherexpenses. After this the defendant issued handbills offering a reward of Rs. 150 to any onewho might find out the boy. The plaintiff traced the boy to Rishikesh and found him there.

He wired to the defendant who went to Hardwar and brought the boy back toCawnpore. He gave to the plaintiff a reward of two sovereigns and afterwards on hisreturn to Cawnpore gave Rs. 20 more. The plaintiff did not ask for any further paymentand continued in the defendants service for about six months when he was dismissed. He

then brought this suit, out of which this application arises, claiming Rs. 499 out of theamount of the reward offered by the defendant under the handbills issued by him. The

record shows that the handbills were issued subsequently to the plaintiffs departure for

Hardwar. It appears, however, that some of the handbills were sent to him there.

The court below having dismissed the claim, this application for revision has been made

by the plaintiff and it is claimed on his behalf that as he traced out the boy he is entitledto the reward offered by the defendant.

The defendant contends that the plaintiff claim can only be maintained on the basis of acontract, that there must have been an acceptance of the offer and an assent to it, thatthere was no contract between the parties in this case and that in any case the plaintiffwas already under an obligation to do what he did and was, therefore, not entitled torecover. On the other hand, it is contended on behalf of the plaintiff, that a privity ofcontract was unnecessary and neither motive nor knowledge was essential. In anyopinion a suit like the present one can only be founded on a contract. In order to

constitute a contract there must be an acceptance of the offer and there can be noacceptance unless there is knowledge of the offer. Motive is not essential but knowledgeand intention are. In the case of a public advertisement offering a reward, theperformance of the act raises an inference of acceptance. This is manifest from S. 8 of the

Contract Act, which provides that Performance of the conditions of a proposal is an

acceptance of the proposal.

In the present case the claim cannot be regarded as one on the basis of a contract. Theplaintiff was in the service of the defendant. As such servant he was sent to search for themissing boy. It is true that it was not within the ordinary scope of his duties as a minim to

search for a missing relative of his master but he agreed to go to Hardwar in search of theboy and he undertook that particular duty. Being under that obligation, which he had


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incurred before the reward in question was offered, he cannot, in my opinion, claim thereward. There was already a subsisting obligation and therefore, the performance of theact cannot be regarded as a consideration for the defendants promise. For the above

reasons hold that the decision of the Court below is right and I dismiss the application withcost. Revision Application dismissed.

n contract law, an offer is a promise in exchange for performance by another party. An

offer can be revoked or terminated under certain conditions. There are also times when

an offer can be negotiated to create a counter-offer.

HOW DOES AN OFFER WORK?

Ronald wanted to purchase a new condo in the city, so he combed the classified adslooking for the perfect place. He came across an ad for a condo in the perfectneighborhood and at the right price. The ad was, in fact, an offer by the seller to sell hishome to a potential buyer.

Offer is one of the elements that make for a valid contract, and is the main focus of ourlesson. To back it up a bit, there are six elements to a contract. These elements include:

Offer

Acceptance Consideration

Mutuality Capacity Legally acceptable terms

When two parties choose to enter into a contract, the first thing that occurs is an offer. Theoffercan be money or another thing of value in exchange for performance by the otherparty.

The offer can come in the form of a:

Letter Newspaper

Website

Fax Email Behavior

In technical terms, the offer is not really an offer until it is received by the offeree. By listingthe ad for the condo in a newspaper or on a realtor's website where Ronald is able toview it, the offer is valid.


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There are other things to consider when determining the validity of an offer. Some offershave a specific time limit to be accepted. In the case of a time limit, the offeree mustrespond with acceptance of the offer prior to its expiration or the offer is no longer valid.

An offer can also be revokedor taken back by the offeror at any time prior to

acceptance. If Ronald did not act fast enough, it would be within the legal right of theseller to revoke his offer to sell his condo.

It is also possible to terminatean offer, or take the offer off of the table completely. Thereare a few ways this can be done.

Death of either party

Insanity of either party

Death or destruction of the person or the thing required to perform the contract terms

The offer can also be terminated if a counter-offeris made by changing the terms of theoriginal offer. If Ronald decides to offer a lower price for the condo, the original offerwould be terminated, and the new offer would reflect the new offer for the lower sellingprice.

As the two parties engage in price haggling, what they are really doing is negotiating amutually beneficial agreement for the purchase of the condo.

Once both parties agree on a fair price, the offer will stand.

In our example of the condo sale, the offer was pretty straightforward. The seller placedan ad with a realtor that offered the condo for sale at a certain price. Ronald could eitheraccept the condo at the stated price or counter-offer with a lower price. The owner caneither accept or decline the counter-offer. This is all part of the negotiation process.

However, what happens when an offer comes in the form of an advertisement with amass target audience, like the local newspaper, and involves consideration? Things can

take a different turn.

Mrs. Carlill v. Carbolic Smoke Ball Co.[1893]

Facts

Carbolic Smoke Ball Co. (D) manufactured and sold The Carbolic Smoke Ball. Thecompany placed ads in various newspapers offering a reward of 100 pounds to anyperson who used the smoke ball three times per day as directed and contracted

influenza, colds, or any other disease. After seeing the ad Carlill (P) purchased a ball andused it as directed. Carlill contracted influenza and made a claim for the reward.


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Carbolic Smoke Ball refused to pay and Carlill sued for damages arising from breach ofcontract. Judgment for 100 pounds was entered for Carlill and Carbolic Smoke Ballappealed.

Issue Does one who makes a unilateral offer for the sale of goods by means of an advertisement

impliedly waive notification of acceptance, if his purpose is to sell as much product aspossible?

Holding and Rule (Lindley)

Yes. One who makes a unilateral offer for the sale of goods by means of an advertisementimpliedly waives notification of acceptance if his purpose is to sell as much product aspossible.

The court held that a person who makes an offer may decline to require notice ofacceptance if he or she wishes. One who makes an offer dispenses with the requirementof notice of acceptance if the form of the offer shows that notice of acceptance is notrequired. To accept an offer, a person need only follow the indicated method of

acceptance. If the offeror either expressly or impliedly intimates in his offer that it will besufficient to act without giving notice of acceptance, performance is sufficientacceptance without notification.

The court held that an advertisement is considered to be an offer when it specifies thequantity of persons who are eligible to accept its terms. If such an advertisement requiresperformance, the offeree is not required to give notice of his performance.

The court addressed the issue of whether the ad was intended to be a promise or whetherit was merely puffing. The court pointed to Carbolic Smoke Balls claim in the

advertisement that it had deposited 1000 pounds with Alliance Bank, which the courtdecided was intended to demonstrate the companys sincerity in paying the reward.

Concurring (Bowen)

Notification of acceptance is required under our law. The person who makes the offermay dispense with notice to himself if he thinks it desirable to do so. He may expressly orimpliedly create any method of acceptance for his offer. An offeree need only follow themethod indicated for acceptance. The requirement of notice of acceptance to theofferor must be determined by an objective reasonable person standard.


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In the advertisement case, it seems to me that an inference may be drawn from thetransaction itself that a person is not to notify his acceptance of the offer before heperforms the condition, but that if he performs the condition notification is dispensed with.We must look to the essence of the transaction and what the offeror is bargaining forunder the circumstances. Under these facts, the defendant impliedly indicated that it did

not require notification of acceptance of the offer.

Disposition

Appeal dismissed.

legal aspects of business notes

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