bel assginment final

7/24/2019 Bel Assginment Final

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Business Environmental Law

ASSIGNMENT A

Q1 What is business environment? What are the benefits & limitations ofenvironmental analysis?

Answer:

Business Environment is thecombination of internal and external factorsthat influence a company's operating situation. The business environment

can include factors such as: clients and suppliers; its competition andowners;improvements intechnology;laws andgovernmentactivities;andmarket,social andeconomic trends.

Benefits of Environmental Analysis:

1. Environmental analysis gives an idea of organizations environment.2. Environmental analysis gives a brief about competitors.

3. Environmental analysis tells us about opportunities to reap profits.4. Environmental analysis gives details about threats in the environment.5.

Environmental analysis keeps the manager informed and alert.

6. Business is all about making the right decision at the right time. Withoutproper environmental analysis the right decision cant be made.

7.

Environmental analysis helps in predicting the future.8.

Environmental analysis helps in suitable modification of strategies, as

and when required.

Limitations of Environmental Analysis:

1. Today the environment is turbulent and dynamic and it is difficult toforecast or predict the environment.

2.

Business environment is global and any development in any part of theworld can influence the business. Even a small political move can have a

drastic impact, which in very difficult to scan and assess.

3. The Effectiveness of environmental analysis depends upon how it ispracticed, i.e., whether it is a systematic approach, ad hoc or processed.

Under a systematic approach, information for environmental scanning is
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collected, scanned and monitored on a continuous basis and forecast and

is assessed for the relevant factor. In an ad hoc approach, an organizationconducts special surveys and studies to deal with specific environmental

issues from time to time. In a processed form approach, an organization

uses information in a processed form, available from different sources,

both inside and outside the organization. For effectiveness, anorganization should use the combination of these approaches instead of

just following the tried formulas, because all have their importanceaccording to requirement.

Q2 Define contract. Explain any four element of a contract.

Answer:A contract is defined as an agreement enforceable at law, made

between two or more persons, by which rights are acquired by one or more,to act on the part of the other. It creates and defines obligations between theparties.

Elements of a contract:

1. Offer and Acceptance

A contract basically evolves from an offer by one party and acceptance of

the same, by the other party. The acceptance should be definite and withoutany qualification. There should be a consensus ad idem between the twoparties on the terms and conditions of contract.

2. Intention to Create Legal Relationship

The validity of a contract is dependent on the intention of the contractingparties. A contract will be valid only when the parties to the contract intend

to create a legal relationship between themselves. Non-existence of such an

intention will not give rise to a valid contract. Agreements of social naturedo not contemplate legal relationship and hence they are not contracts.

The parties to a contract may either specifically lay down that the

agreement entered is not a formal or legal agreement or in certain cases the

non-existence of an intention to enter into a legal relationship can beimplied from the agreement itself.


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3.

Capacity to Contract

Indian Contract Act Section 10 specifies that an agreement to be a contractis entered between the two parties who are competent to contract. The

persons declared to be incompetent to contract are minors, persons ofunsound mind and persons disqualified by any Law to which they are

subject.

4. LAWFUL CONSIDERATION:

In order for a contract to be binding it must be supported by valuable

consideration. That is to say, one party promises to do something in returnfor a promise from the other party to provide a benefit of value

The following aspects should not exist in case of consideration and objectfor the contract to be declared as legal and binding.

1. It should not be Forbidden by Law:

2.

Performance should not Defeat the Provisions of any Law

3. It should not be Fraudulent

4. It should not be Considered Immoral

Q3What are the rights of a finder of a good under the Indian contract Act?

Answer:

i.According to Section 168, the finder of goods can exercise lien over the

goods till the owner reimburses the expenses incurred for the safe custodyof the goods.

ii.Where the owner has announced a reward for recovery of the lost article,

the finder has the right to retain the goods till he receives the award.

iii.The finder has a right to sell the article:

If the owner cannot be found provided the bailee has made

reasonable efforts;

If the owner refuses, upon demand, to pay the lawful charges of the

finder; The article is of perishable nature or that, which loses most of its

value with passage of time; or

If the lawful charges of the finder in respect of the goods found,

amount to two thirds of their value.


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Q4 For every valid agreement there should be a consideration. Comment

Promises are made without giving them a thought. In order to make an

agreement enforceable, law requires such agreements to be backed byconsideration.

Consideration may be of following kinds:i.Executory or future consideration, in return of a promise which is to

be fulfilled in future.

ii.Executed or present in which it is an act or forbearance made orsuffered for a promise. For example, in a cash sale, consideration is

present or executed.

iii.Past consideration is the one which pays for a past act or

forbearance. An act constituting consideration which took place and

is complete before the promise is made.

As per Section 23, there has to be a lawful consideration for a legal object inevery contract. Hence, the following aspects should not exist in case ofconsideration and object for the contract to be declared as legal and binding.

5. It should not be Forbidden by Law:

6. Performance should not Defeat the Provisions of any Law

7. It should not be Fraudulent

8. It should not be Considered Immoral

Q5 Explain the rights of an unpaid seller under Indian sales of goods Act.

Answer:

Rights of unpaid seller against the goods:

Subject to the provisions of this Act, the unpaid seller of goods who is in

possession of them is entitled to retain possession of them until payment or

tender of the price in the following cases, namely

a.

Where the goods have been sold without any stipulation as tocredit.

b.Where the goods have been sold on credit, but the term ofcredit has expired.

c.Where the buyer becomes insolvent


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3.

The holder in due course (one who acquires the instrument in good

faith and for consideration) gets it free from all defects includingfraud provided he was not party to it.

4. The holder in due course is entitled to sue for recovery of the sum in

his own name.

5. The instrument is transferable till maturity and in case of cheque tillit becomes stale (on the expiry of six months from the date of the

issue).6. Under Sections 118 and 119 of the Act, negotiable instruments are

subject to certain presumptions in order to facilitate business

transactions. It shall be presumed that every Negotiable Instrumentis drawn for consideration irrespective of consideration mentioned in

the document. Every bill is accepted within reasonable time beforematurity and transferred before its maturity. The instruments were

endorsed in the order in which they appear on it. It is presumed that

the holder of instrument is holder in due course. However, the abovepresumptions are rebuttable by evidence to the contrary. The burdenof proof lies on defendant and not upon the plaintiff.

Q2 Explain various types of companies.

PRIVATE COMPANIES

A private company should have at least two persons (Section 12) to

subscribe their names to Memorandum and Articles of Association. Section26 provides that a private limited company must have articles of its own.

As per Section 3(1)(iii), a private company means a company which has a

minimum paid-up capital of one lakh rupees or such higher paid-up capital

as may be prescribed, and by its articles,

PUBLIC COMPANIES

According to Section 3(1)(iv) of The Companies Act, 1956, publiccompany means a company which

a.

Is not a private company.b.

Has a minimum paid-up capital of five lakh rupees or suchhigher paid-up capital, as may be prescribed.

c.

Is a private company which is a subsidiary of a companywhich is not a private company.

d.

Is incorporated with a minimum of 7 subscribers as required.

e. Has a minimum 3 directors as stipulated.


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LIMITED COMPANYA company can limit its liability either by shares or by guarantee.

a. Companies Limited by Shares [Section 12(2) (a)]: In this type of acompany, the liability of the members is limited to the amount

remaining unpaid on the shares.

b.

Companies Limited by Guarantee not having Share Capital: In thistype of company, the memorandum limits the members liability. It islimited to such amount as he may have undertaken by the

memorandum of association to contribute in case of winding up.

c.

Companies Limited by Guarantee having Share Capital: If the company

is limited by guarantee while having its own share capital, the liability ofmembers would be towards guarantee as specified in the

memorandum of association and in addition any sums remaining

unpaid on the shares held by him.

UNLIMITED COMPANY

Unlimited Companies do not have any limit on the extent of liability of itsmembers. The liability of each member extends to the whole amount of the

companys debts and liabilities. However, the members cannot be sued upondirectly by the companys creditors.

This type of a company may be formed where heavy liabilities are not likely

to be incurred. An unlimited company may increase and decrease its share

capital (if it exists) without any restriction by passing a special resolution.Also, the company may buy its own shares which is not allowed for a

limited company by virtue of Section 77.

A company which is registered as an unlimited company may get itself re-

registered as a limited company under Section 32 of the Act. There would

not be any change in any debts, liabilities, obligations or contracts of thecompany existing at the time of conversion and such debts will beenforceable.

The articles of association of a company must state the number of memberswith which the company is registered and the amount of share capital (if

any) [Section 27].


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GOVERNMENT COMPANY

Section 617 defines a Government Company as any company which has at

least 51% of the paid-up share capital held either by the Central

Government, or by any State Government or Governments or partly by the

Central Government and partly by one or more State Governments. As theconcept of Government Company has been introduced in the Companies

Act, 1956, it follows that a government company will mean a companyregistered and incorporated under the Companies Act, 1956.

A statutory corporation formed under a statute of the legislature, like Life

Insurance Corporation, Air India, etc., are neither companies coming withinthe purview of the Companies Act nor are they Government Companies.

FOREIGN COMPANYAs per Section 591, a foreign company means a company incorporated

outside India but having a place of business in India. Thus, if a company isincorporated outside India, but employs agents in India without establishing

a place of business here, it cannot be considered as a foreign company. In

Deverall vs. Grand Advertisement Inc. (1954), it was held that a companyshall be said to have a place of business in India if it has a specified or

identifiable place at which it carries on business such as an office,storehouse, go down or other premises having some concrete connectionbetween locality and its business.

It may also be noted that if a company is incorporated outside India, has

Indian shareholders but does not have a place of business in India, then suchcompany will not be included within the purview of a foreign company.

Likewise, a company that is incorporated in India but which has foreignshareholders is an Indian company and not a foreign company.

If 50 percent or more of the paid-up share capital (whether equity orpreference or partly equity and partly preference) of a company

incorporated outside India is held by one or more citizens of India or/andby one or more Indian companies, singly or jointly, such company shallcomply with such provisions as may be prescribed as if it were an Indian

company.

INDIAN COMPANYIndian company means a company formed and registered under the

companies act, 1956. Any company formed and registered under any lawrelating to companies formerly in force in any part of India, other than

Jammu and Kashmir and the union territories as specified or a corporation


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established by or under a central, state or provincial act or any institution,

association or a body which is declared by the board to be company undersection 2 (17) are referred as Indian company. In the case of state of Jammu

and Kashmir, a company formed and registered under any law for the time

being in force in the state.

Investment CompaniesSection 372(10) of the Companies Act defines this type of company as acompany whose principal business is the acquisition of shares, stock,

debentures or other securities. Such types of companies buy shares and

other instruments so that they can be sold at a higher price at a later date orselling them with a view to buy at lower price. The companies also earn

dividend and interest on these instruments.A company which carries on its business of manufacturing may invest

subject to the objects clause of the memorandum of association. All

investments of such a company are to be made in the companys own name.

Public Financial InstitutionsCompanies Act specifies that the following financial institutions shall beregarded as public financial institutions:

The Industrial Credit and Investment Corporation of India. (ICICI)The Industrial Finance Corporation of India. (IFCI)The Life Insurance Corporation of India. (LIC)

The Unit Trust of India. (UTI)The Industrial Development Bank of India. (IDBI)

Defunct CompanyA defunct company means a company which never commenced businessor which is not carrying on business and has either no assets or has such

assets as shall not be sufficient to meet the costs of liquidation. However,a company is not considered as defunct if the cessation of business is due

to the conduct of winding up. Also, the mere reduction of members belowstatutory minimum does not render a company defunct.

Closely Held Company

A public company which has raised capital only from the members,directors, relatives and kith and kin of the promoters and not raised capital

from the public.


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Widely Held Company (A Listed Company)A Public Company which has raised capital from the public by issue of

prospectus and its shares are dealt in two or more Stock Exchanges.

Q3 What relief is/are available to the consumer under Consumer

Protection Act?

ANSWER(a) Removal of defects from the goods,

(b) Replacement of the goods;(c) Refund of the price paid;

(d) Award of compensation for the loss or injury suffered;(e) Removal of defects or deficiencies in the services;

(f) Discontinuance of unfair trade practices or restrictive trade practices ordirection not to repeat them;

(g) Withdrawal of the hazardous goods from being offered to sale; or

(h) Award for adequate costs to parties.


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CASE STUDY:

Case1A dealer in radios gives a Murphy radio to a customer on the terms that

Rs. 100 should be paid by him immediately and Rs 200 more in two

monthly equal installments. It was further agreed that if the radio is found

defective the customer may return it within a week but not later. Thecustomer makes default in paying the last installment. Can the radio

dealer take back the radio on his default?

Answer

Where under a contract of sale the property in the goods has passed to thebuyer and the buyer wrongfully neglects or refuses to pay for the goods,

according to the terms of the contract, the seller may sue him for the priceof the goods [Section 55(1)].

When a contract becomes void, any benefit derived out of the contract byone party is required to be restored to the other. It is significant to note

that the law of restitution covers only benefits received and not lossesincurred. The principle of restitution is that the defendant who has been

unjustly enriched at the expense of the plaintiff is required to makerestitution to the plaintiff.

Case2X sees a book displayed in a shelf of a book shop with a price tag of Rs. 85.

X tenders Rs. 85 on the counter and asks for the book. The bookseller

refuses to sell saying that the book has already been sold to someone else

and he does not have another copy of that book in the stock. Is thebookseller bound to sell the book to X?

AnswerThe book seller is not bound to sell the book to X because the display ofgoods in a shop is not an offer but an invitation to treat. It is the customer

(X) who made the offer and the respondent (book seller) can either

accept/reject the offer (Pharmaceutical Society of Great Britain v BootsCash Chemists (1953), Crawley v Rex (1909).

Displaying a book in a shelf with a price tag is simply an invitation to treat

It's a pre-offer communication. An indication of a persons willingness to

negotiate to a contract


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ASSIGNMENT C

Q1 D Q11 A Q21 E Q31 A

Q2 D Q12 C Q22 C Q32 B

Q3 A Q13 B Q23 D Q33 C

Q4 B Q14 D Q24 A Q34 D

Q5 E Q15 E Q25 C Q35 C

Q6 C Q16 A Q26 A Q36 D

Q7 E Q17 B Q27 D Q37 B

Q8 B Q18 D Q28 C Q38 C

Q9 A Q19 B Q29 A Q39 B

Q10 C Q20 D Q30 D Q40 C

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