Contract Act for Entrepreneurs

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5 DECEMBER 09

5 DECEMBER 09 www.afterschool.tk www.afterschool.tk 11

CONTRACT ACT FOR ENTREPRENEURS

by : by : DR. T.K. JAIN DR. T.K. JAIN AFTERSCHO AFTERSCHO☺☺OLOL

centre for social entrepreneurship centre for social entrepreneurship sivakamu veterinary hospital road sivakamu veterinary hospital road

bikaner 334001 rajasthan, india bikaner 334001 rajasthan, india FOR –

FOR – PGPSEPGPSE // CSECSE PARTICIPANTSPARTICIPANTS mobile : 91+9414430763

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My words....

Here I present a few basic qu

Here I present a few basic questionsestions on contract law.on contract law. I wish that moreI wish that more people should become entrepreneurs. An ordinary In

people should become entrepreneurs. An ordinary Indian entrepreneur dian entrepreneur wishes to remain an honest entrepreneur and

wishes to remain an honest entrepreneur and contribute to the developmentcontribute to the development of nation but we h

of nation but we have to strengthen those institutions which truly promoteave to strengthen those institutions which truly promote entrepreneurship, not just degree granting institutions. Let us work

entrepreneurship, not just degree granting institutions. Let us work together together to promote knowledge, wisdom, social development and education. We to promote knowledge, wisdom, social development and education. We

believe in free education for all, free su

believe in free education for all, free support for all, entrepreneurshippport for all, entrepreneurship opportunities and training for all. Let us

opportunities and training for all. Let us work together for these goals. ... Iwork together for these goals. ... I alone cant do

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5 DECEMBER 09

A principal revokes an agency,

but the agent is not aware of it and

makes a contract, will the contract

be valid ?

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Answer

Yes Yes

agency is revoked when the agent comes to agency is revoked when the agent comes to know about its revocation. In this case, the know about its revocation. In this case, the agent is not aware of revocation, so the agency agent is not aware of revocation, so the agency

is still valid. is still valid.

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5 DECEMBER 09

What are the cases, when agency

cannot be revoked at all ?

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Solution

Agency cannot be revoked in following cases : Agency cannot be revoked in following cases :

1. agency with interest 1. agency with interest

2. agent has already incurred personal liability 2. agent has already incurred personal liability

3. agent has partly exercised his authority 3. agent has partly exercised his authority

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5 DECEMBER 09

What is agency with interest ?

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Answer

When the agent has some interest attached to When the agent has some interest attached to

the agency, it is called agency with interest the agency, it is called agency with interest

(read sec. 202) (read sec. 202)

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5 DECEMBER 09

What are the duties of an agent ?

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Solution

He must act within his scope He must act within his scope

he must keep true accounts he must keep true accounts

he must give material information to the he must give material information to the

principal principal

he must follow the instructions of principal he must follow the instructions of principal he must not make secret profit, act honestly he must not make secret profit, act honestly

and reasonably and reasonably

he must not reveal confidential information of he must not reveal confidential information of

the principal the principal

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5 DECEMBER 09

When does agency terminate ?

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Answer

In the following cases : In the following cases :

1After specified time 1After specified time

2 when the object of agency is destroyed 2 when the object of agency is destroyed

3 when agency is revoked 3 when agency is revoked

4 when agency is renunciated by the agent 4 when agency is renunciated by the agent 5 when the principal dies / becomes lunatic 5 when the principal dies / becomes lunatic

6 as per agreement 6 as per agreement

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5 DECEMBER 09

Who is a factor ?

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Answer

A factor is a

A factor is a mercantile agent employed to

mercantile agent employed to

sell goods which have been placed in his

possession or contract to buy goods for his

principal.

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5 DECEMBER 09

When can a finder of lost goods

sell them ?

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Answer

where the owner cannot with reasonable diligence be where the owner cannot with reasonable diligence be

found, or found, or

when found, he refuses to pay the

when found, he refuses to pay the lawful charges of lawful charges of the finder and—

the finder and—

if the thing is in danger of perishing or losing greater if the thing is in danger of perishing or losing greater

part of its value, or part of its value, or

when the lawful charges of the finder for

when the lawful charges of the finder for thethe

preservation of goods and the finding out of the owner preservation of goods and the finding out of the owner

amounts to two-thirds of the value of the thing amounts to two-thirds of the value of the thing

(Section 169). (Section 169).

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5 DECEMBER 09

What is bailment ?

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Answer

Bailment is a

Bailment is a voluntary delivery of goods for a temporary purposevoluntary delivery of goods for a temporary purpose onon the understanding that they are to be returned in specie in the same the understanding that they are to be returned in specie in the same or altered form. The ownership of

or altered form. The ownership of the goods remains with the bailor,the goods remains with the bailor, the bailee getting only the possession.

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5 DECEMBER 09

What is gratuitous bailment ?

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Answer

A gratuitous bailment is one in which

neither the bailor nor the bailee is entitled

to any remuneration. Such a bailment may

be for the exclusive

be for the exclusive benefit of the bailor,

benefit of the bailor,

e.g., when A leaves his cow with a

neighbour to be looked after in

neighbour to be looked after in A’s

A’s

absence on a holiday.

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5 DECEMBER 09

What is a contract of indemnity ?

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Answer

A contract of indemnity is a contract by

which one party promises to save the other

party from loss caused to him by the

conduct of the promisor himself, or by

conduct of the promisor himself, or by the

the

conduct of any other person

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5 DECEMBER 09

What is an injunction ?

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Answer

An injunction, is an order of a

An injunction, is an order of a Court restraining aCourt restraining a person from doing a particular act. It is a mode of person from doing a particular act. It is a mode of securing the specific performance of a negative term securing the specific performance of a negative term

of the contract of the contract

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5 DECEMBER 09

What is liquidated damages?

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Answer

Where the contracting parties fix at the

time of contract the amount of damages

that would be payable in case of breach, it

is called liquidated damages

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5 DECEMBER 09

What is novation of a contract ?

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Answer

when a new contract is substituted for

when a new contract is substituted for existing contract either existing contract either between the same parties or between different parties, the between the same parties or between different parties, the consideration mutually being the discharge of the old contract. consideration mutually being the discharge of the old contract.

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5 DECEMBER 09

What the cases when specific

performance of contract is not

ordered ?

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Answer

IN THE FOLLOWING CASES :

-where monetary compensation is an

where monetary compensation is an adequate

adequate

remedy

where the Court cannot supervise the

execution of the contract,

where the contract is for

where the contract is for personal service

personal service

where one of the parties is a minor.

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5 DECEMBER 09

WHAT ARE THE

RESPONSIBILITIES OF THE

FINDER OF THE LOST GOODS?

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ANSWER

The liability of a finder of goods belonging

to someone else is that of a bailee. This

means that he must take as much care of

the goods as a man of ordinary

the goods as a man of ordinary prudence

prudence

would take of his own goods of the same

kind.

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5 DECEMBER 09

What are the responsibilities of a

person who is getting gratuitous

benefits ?

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Answer

Section 70 of the Indian Contract Act provides Section 70 of the Indian Contract Act provides that where a person lawfully

that where a person lawfully does something for does something for another person or delivers anything to him

another person or delivers anything to him

without any intention of doing so gratuitously and without any intention of doing so gratuitously and the other person accepts and enjoys the benefit the other person accepts and enjoys the benefit thereof, the latter must compensate the former

thereof, the latter must compensate the former or or

restore to him the thing so delivered. restore to him the thing so delivered.

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5 DECEMBER 09

What is a contingent contract ?

As per Section 31, a contingent contract

is a contract to do or not to

is a contract to do or not to do something,

do something,

if some event

if some event collateral to such contract,

collateral to such contract,

does or does not happen.

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What are the principles on which

quasi contracts are based ?

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5 DECEMBER 09

Answer

A quasi contract is an obligation. It is an

obligation of a person towards another

person because he has got something

unjustifiably. It is based on the equitable

principle that a person shall not be

allowed to enrich himself unjustly at the

expense of another

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What is the extent of liability of

the surety ?

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5 DECEMBER 09

Answer

As per sec. 128 :The liability of the surety

is co-extensive with that of the principal

debtor unless the contract otherwise

provides . A creditor can even sue

provides . A creditor can even sue the

the

surety without sueing the principal debtor.

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What is pledge ?

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5 DECEMBER 09

Answer

Pledge or pawn is a contract whereby a

Pledge or pawn is a contract whereby an

n

article is deposited with a lender of

money or promisee as security for the

repayment of a loan or performance of a

promise.

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5 DECEMBER 09

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5 DECEMBER 09

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Spread the concepts of

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entrepreneurship entrepreneurship

let us work for social upliftment together let us work for social upliftment together

let us work for some common goals let us work for some common goals

conduct workshops on social entrepreneurship conduct workshops on social entrepreneurship

make your career in social entrepreneurship make your career in social entrepreneurship

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5 DECEMBER 09

THANKS....

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