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Legal Aspects of Business is the 9th unit in the syllabus of Commerce UGC NET 2022. This article aims to introduce some important topics under Legal Aspects of Business from the syllabus for Commerce UGC NET 2022.
What is Business Law?
Business Law can be defined as a law discipline which is also referred to as Mercantile Law. Business Law works with the rules based on which all the transactions amongst people and commercial firms are overseen.
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Indian Contract Act, 1872
The Law of Contract institutes the utmost vital section of Mercantile or Commercial Law. It is the groundwork upon which the superstructure of modern business is constructed. It influences everybody, especially trade, commerce and industry. It could be thought that the contract is the primary groundwork of civilized society.
The Indian Contract Act is categorized into two segments.
- The first segment (Section 1-75) discusses the general principles of the rule of contract and hence applies to all contracts regardless of their nature.
- The second segment (Sections 124-238) discusses certain particular types of contracts, special contracts of Indemnity and Guarantee, Bailment, Pledge, and Agency.
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What is a Contract?
By section 2(h) of the Indian Contract Act, 1872, an agreement enforceable by law is a contract. A contract is a blend of the two factors:
- There should be an agreement.
- Agreement should come under legal obligation.
Agreement
By the section 2(e), Every promise or every set of promises, forming the consideration for each other, should be termed as an agreement
Promise
By section 2(b), when the individual to whom the application is made implies his assent thereto, the application is said to be accepted. A proposal, when accepted, will turn into a promise.
Proposal
When an individual implies to another individual his inclination to do or to abstain from doing something, with an understanding to gain the agreement of the other to such act or abstinence, then he is said to propose.
Acceptance
Acceptance is a term by the person putting forward the offer, of his inclination to be bound by the conditions of the offer. Section 2 (b) of the Act describes the word ‘acceptance’ as when the individual to whom the proposal is made indicates his agreement thereto, the proposal is said to be accepted. A proposal when assented becomes a promise.
Consideration
The word ‘consideration’ is utilized in the sense of ‘quid pro quo’, which means ‘something’ in return. The Act describes consideration as to when at the desire of the promisor, the promisee or any other individual has done or abstained from doing, does or abstains from doing, or promises to do or promises to abstain from doing something such action of abstinence or promise is considered a consideration for the promise. The consideration comprises of ‘benefit’ to the promisor. It may comprise of a ‘detriment’ to the promisee. The detriment could be a loss or accountability to the promisee. But not necessarily.
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What is Fraud?
- The proposal, as to the detail of which is not true by one who does not believe it to be true.
- The active coverup, of detail by one, having information or belief of the fact.
- A promise made without the purpose to perform it.
- Any other act tailored to betray.
- Any such action or slip as the rule especially states to be fraudulent
Performance of Contract
The word ‘Performance of contract’ signifies that both the promisor and the promisee have satisfied their respective obligations which the contract sited upon them.
Discharge of a contract
A contract fashions particular obligation on one/all parties concerned. The discharge of a contract takes place when these obligations come to an end. There are many conditions in which a contract is discharged. Contracts can come to termination in the following ways:
- By Performance
- By agreement/ consent
- By promise failing to provide facilities for action
- By breach of contract
- By impossibility of action
- By death
- By declining tender of action
- By illegal material modification of the contract
- Discharge by the passage of time
- By action of law
Breach of Contract
A contract is said to be breached/broken when either of the parties (promiser and promise) fails or denies to perform his responsibilities or his guarantee under the contract. Hence, it could be said that when a binding agreement is not honoured by one or more parties by not fulfilling his promise, the agreement could be said to be breached
Quasi Contract
There are contracts without offer, acceptance, consideration, etc and is just based on social responsibility. Such contracts are known as quasi-contracts. The word ‘Quasi’ means pseudo/false. Therefore, a Quasi-contract means a pseudo-contract. When we discuss a valid contract, we suppose that it will have certain factors like offer and acceptance, consideration, the capacity to contract, and free will. But there are other kinds of contracts as well. There are circumstances where the rule implies a promise and levies responsibilities on one party while deliberating rights to the other even when the basic factors of a contract are not existing. These promises are not lawful contracts, but the Court identifies them as relations similar to a contract and imposes them like a contract.
Features of a Quasi Contract
- It is frequently a right to the money and is usually though not always to a liquidated amount of money
- The right is not the consequence of an agreement but is levied by rule.
- The right is not accessible against everybody in the world but only against a specific people/person. Hence it looks like a contractual right.
Sections 68 – 72 of the Indian Contract Act, 1872 describe five conditions under which a Quasi-contract comes to happen. But we should remember that there is no actual contract between the parties and the rule levies the contractual obligation due to the unusual conditions.
More topics come under the unit Legal Aspects of Business. Check the detailed article about the syllabus of Commerce UGC NET 2022 to know about all the subtopic that comes under the unit of Legal Aspects of Business. Familiarize yourself with the concepts and revise the factual information regularly. Download the Entri app to learn more about these topics and other subjects in the syllabus for commerce UGC NET 2022 exam paper 2.
