1. The document discusses key concepts from Indian contract law such as the definition of a contract, essential elements of a valid contract including offer, acceptance, consideration, competent parties and free consent. 2. It also covers different types of contracts such as express, implied, contingent and quasi contracts. Concepts like performance, discharge of contract by performance, breach of contract and remedies for breach are also summarized. 3. Various other contract law topics such as void, voidable, illegal and unenforceable contracts are defined along with examples.

1. Business LawBusiness Law
Pradeep GiriPradeep Giri
Any comment /suggestionAny comment /suggestion
pradeepgiri26@gmail.compradeepgiri26@gmail.com

2. Contract Act 1871 (Indian Contract Act)Contract Act 1871 (Indian Contract Act)
 Agreement enforceable by law is known as contract.Agreement enforceable by law is known as contract.
 Agreement is offer and acceptance.Agreement is offer and acceptance.
 All Agreement are not contract but all contract are agreement.All Agreement are not contract but all contract are agreement.
 Agreement within intention of creating a legal relationship are thoseAgreement within intention of creating a legal relationship are those
Agreement which can form contact any of the parties failing he may be suedAgreement which can form contact any of the parties failing he may be sued
in the court of law.in the court of law.
 A promise in return of a promise is consideration.A promise in return of a promise is consideration.
 Consideration is some thing in return of something.Consideration is some thing in return of something.
Sell PenSell Pen
X YX Y
Rs. 100/-Rs. 100/-
XX consideration is Rs. 100/-consideration is Rs. 100/-
YY consideration is a pen.consideration is a pen.
 Because X sell pen and got Rs.100/- Y give Rs.100 and got pen.Because X sell pen and got Rs.100/- Y give Rs.100 and got pen.

3. ProposalProposal
 ““When a person signifies to another his willingness to do abstain from doingWhen a person signifies to another his willingness to do abstain from doing
anything, with a view to obtaining the assent of that other to such act oranything, with a view to obtaining the assent of that other to such act or
abstinence, he is said to make proposal”abstinence, he is said to make proposal” Sec2(a)Sec2(a)
AcceptanceAcceptance
 ““A Proposal is said to be accepted when the person to whom the signifiesA Proposal is said to be accepted when the person to whom the signifies
his assent there to . An offer when accepted because a promise.his assent there to . An offer when accepted because a promise. Sec.2(b)Sec.2(b)
Essential Of Valid OfferEssential Of Valid Offer
1.1. Offer must intend to create legal relationship.Offer must intend to create legal relationship.
2.2. Terms of offer must be define ,unambiguous and certain.Terms of offer must be define ,unambiguous and certain.
3.3. Offer must be communicated to the person to when it is made.Offer must be communicated to the person to when it is made.
4.4. Offer should not contain a term, the non- compliance of which may beOffer should not contain a term, the non- compliance of which may be
assumed amount to acceptance.assumed amount to acceptance.
5.5. An invitation is not a offer.An invitation is not a offer.
6.6. A statement of price is not a offer.A statement of price is not a offer.
7.7. A offer must be made to assent of that other personA offer must be made to assent of that other person

4. Offer :Type of offerOffer :Type of offer
1.1. Express:Express: written or oral formwritten or oral form
2.2. Implied:Implied: These offer are made by conduct or situation.These offer are made by conduct or situation.
3.3. Specific:Specific: those offer which are made for a specific person or group Ex.those offer which are made for a specific person or group Ex.
Bank Provide Citizen person 8% interest.Bank Provide Citizen person 8% interest.
4.4. General:General: An offer which is made for every one.An offer which is made for every one.
Essential of valid Acceptance:Essential of valid Acceptance:
1.1. It must be absolute and unqualified.It must be absolute and unqualified.
2.2. It must be according to the manner described or usual & reasonableIt must be according to the manner described or usual & reasonable
manner.manner.
3.3. Must be communicated to the offer.Must be communicated to the offer.
4.4. Must be given within reasonable time.Must be given within reasonable time.
5.5. Must be given before the offer lapses or withdrawn.Must be given before the offer lapses or withdrawn.
6.6. Must be given the party to whom the offer is made.Must be given the party to whom the offer is made.
7.7. Acceptance can not proceeded and offer.Acceptance can not proceeded and offer.
8.8. Silence does not amount to acceptance.Silence does not amount to acceptance.

5. ConsiderationConsideration
1.1. Consideration may not be adequate (Enough).Consideration may not be adequate (Enough).
2.2. Consideration may not be past, future & present.Consideration may not be past, future & present.
3.3. Consideration must not be illusory (Must be fact).Consideration must not be illusory (Must be fact).
4.4. Consideration must be law-full (with a law full Object)Consideration must be law-full (with a law full Object)
Competent PartiesCompetent Parties ::
 Who have the capacity to enter the contract, Parties who are notWho have the capacity to enter the contract, Parties who are not
Competent Parties.Competent Parties.
1.1. Unsound Mind person.Unsound Mind person.
2.2. Person disqualified by law.Person disqualified by law.
 Miner are those person who are not attained age of majority (18 yrs.)Miner are those person who are not attained age of majority (18 yrs.)
 In case the court appointed some one as the guartion of a miner to lookIn case the court appointed some one as the guartion of a miner to look
after the miner and his property. Than the age of majority will be 21 years.after the miner and his property. Than the age of majority will be 21 years.
 Unsound Mind personUnsound Mind person
 IdiotIdiot
 Insane / lunaticInsane / lunatic
 DrunkardDrunkard

6.  Sound MindSound Mind
 A person said to be sound mind who can understand the nature ofA person said to be sound mind who can understand the nature of
contract, contained subject of the contract, understand the effect of thecontract, contained subject of the contract, understand the effect of the
contract and can take rational decisioncontract and can take rational decision
 Idiot:Idiot: Permanently unsound mindPermanently unsound mind
 Insane / lunatic:Insane / lunatic: Permanently unsound mindPermanently unsound mind
 Drunkard:Drunkard: Who looses controlled over his mindWho looses controlled over his mind
 Person disqualified by law.Person disqualified by law.
1.1. Alien Enemy:Alien Enemy: Declared enemy to the country.Declared enemy to the country.
2.2. Convicts:Convicts: Convicts is disqualified Punished by court.Convicts is disqualified Punished by court.
3.3. Diplomats:Diplomats: Ambassador of the country, Do not contract.Ambassador of the country, Do not contract.
4.4. Corporations:Corporations: A company can be enter into contract only to the extentA company can be enter into contract only to the extent
they are allow as per there memorandum of association.they are allow as per there memorandum of association.
5.5. Insolvent:Insolvent: this person not fill the liability they are not contract,this person not fill the liability they are not contract,


7. Free ConsentFree Consent
 Consent Agreeing upon some thing in the same sense consent is said to beConsent Agreeing upon some thing in the same sense consent is said to be
free if it is not caused by co- erosion.free if it is not caused by co- erosion.
1.1. Undue influenceUndue influence
2.2. Mis- representationMis- representation
3.3. FraudFraud
4.4. MistakeMistake
co- erosionco- erosion
 co- erosion is the committing or threatening to commit any act forbidden byco- erosion is the committing or threatening to commit any act forbidden by
IPC (Indian Panel Court) or the un-law full detaining or threatening to detainIPC (Indian Panel Court) or the un-law full detaining or threatening to detain
any property to be prejudice of any person with the intention of causing anyany property to be prejudice of any person with the intention of causing any
person to enter into contract. Ex- Black mal to contract.person to enter into contract. Ex- Black mal to contract.
Undue influenceUndue influence
 One of the party is in a dominance Position.One of the party is in a dominance Position.
 Induces the other party to enter into contract.Induces the other party to enter into contract.
 He takes unfair advantage out of the contract.He takes unfair advantage out of the contract.
 Undue influence to graudan supperior an infirior.Undue influence to graudan supperior an infirior.

8. Mis- representationMis- representation
 A false representation of fact innocently . The person making itA false representation of fact innocently . The person making it
honestly belives to the true or which he does not know to be fase Ex-honestly belives to the true or which he does not know to be fase Ex-
Re-selling Bike contract.Re-selling Bike contract.
Fraud:Fraud:
 A fake representation.A fake representation.
 The representation must be material fact.The representation must be material fact.
 Re-presentation must be flase and intentedRe-presentation must be flase and intented
 Other party actually decieved.Other party actually decieved.
 Other party must have suffered the loss.Other party must have suffered the loss.
Mistake:Mistake:
 It occurs when the party is entending to do one thing by error end upIt occurs when the party is entending to do one thing by error end up
doing something .else, mistake is erroneous belief about something.doing something .else, mistake is erroneous belief about something.
Ex.Ex. Boxer and Hero honda.Boxer and Hero honda.
MistakeMistake
Mistake of lawMistake of law
(Sec.21)(Sec.21)
Mistake of factMistake of fact
(Sec.20)(Sec.20)
Indian LawIndian Law Foreign LawForeign Law

9. Contract ClassificationContract Classification
1.1. Express Contract :Express Contract :
2.2. Implied Contract:Implied Contract:
3.3. Contingent Contract:Contingent Contract:
4.4. Quasi Contract:Quasi Contract:
5.5. Executed Contract:Executed Contract:
6.6. Excutory Contract:Excutory Contract:
7.7. Formal Contract:Formal Contract:
8.8. Simple Contract:Simple Contract:
9.9. Voild Contract:Voild Contract:
10.10. Void Contract:Void Contract:
11.11. Voidable Contract:Voidable Contract:
12.12. Illegal Contract:Illegal Contract:
13.13. Unenforceable Contract:Unenforceable Contract:

10. 1. Express Contract :1. Express Contract :
A contract which must be expressed in written Or oral.A contract which must be expressed in written Or oral.
2. Implied Contract:2. Implied Contract:
which are create by conduct by Signal, By Body Language, Marriage.which are create by conduct by Signal, By Body Language, Marriage.
3. Contingent Contract:3. Contingent Contract:
Which will happen on happing or non-happing of an event co. must be collateral Ex- MayWhich will happen on happing or non-happing of an event co. must be collateral Ex- May
be happen or not in that period of time.be happen or not in that period of time.
4. Quasi Contract (appear to be ):4. Quasi Contract (appear to be ):
It is social contract giving gift in social aspect let no body should be richer at the cost ofIt is social contract giving gift in social aspect let no body should be richer at the cost of
onther.onther.
5. Executed Contract:5. Executed Contract:
Those contract which has been performance by both the party. Ex- If I want to sell a penThose contract which has been performance by both the party. Ex- If I want to sell a pen
at Rs.100/- and you give me pen on the same time.at Rs.100/- and you give me pen on the same time.
6. Excutory Contract:6. Excutory Contract:
These contact which are still to be encuted either by one party / by both partyThese contact which are still to be encuted either by one party / by both party


11. 7. Formal Contract:7. Formal Contract:
Its mentional in English Law and such contract can be created withoutIts mentional in English Law and such contract can be created without
considerations.considerations.
8. Simple Contract :8. Simple Contract :
Its an Indian Law and in this consideration must be happen.Its an Indian Law and in this consideration must be happen.
9. Voild Contract :9. Voild Contract :
Its enforceable by Law such contract are voild then.Its enforceable by Law such contract are voild then.
10. Void Contract :10. Void Contract :
They are created but becomes void because of any law or impossibility ofThey are created but becomes void because of any law or impossibility of
performance. Ex- Cigarette Banperformance. Ex- Cigarette Ban
11. Voidable Contract :11. Voidable Contract :
Which can be made void at the obtain of one of the party who is the suffer. ThisWhich can be made void at the obtain of one of the party who is the suffer. This
is in case of where the contract has been due to free consent.is in case of where the contract has been due to free consent.

12. 12. Illegal Contract :12. Illegal Contract :
Those contract which are against the law.Those contract which are against the law.
13. Unenforceable Contract :13. Unenforceable Contract :
Those contract which bare not enforceable by court of law because of technical.Those contract which bare not enforceable by court of law because of technical.
Essential of valid Contract:Essential of valid Contract:
1.1. Offer / ProposedOffer / Proposed
2.2. AcceptanceAcceptance
3.3. ConsiderationConsideration
4.4. Competent partiesCompetent parties
5.5. Free ConsentFree Consent
6.6. Agreement must not be enpressly declared to be void:Agreement must not be enpressly declared to be void: * Agreement with* Agreement with
miner. * Any agreement which is against the existing law. * Agreement against theminer. * Any agreement which is against the existing law. * Agreement against the
public policy.public policy.
7.7. Written & Registration :Written & Registration : oral agreement are valid agreement incase the laworal agreement are valid agreement incase the law
reqiures any contract to be in writtenreqiures any contract to be in written form and registered than such contract mustform and registered than such contract must
be in written and registered by court otherwise the contract will be unenforceablebe in written and registered by court otherwise the contract will be unenforceable
due to technical flow Ex- Please , sale gigts etc.due to technical flow Ex- Please , sale gigts etc.
8.8. Creation of legal relationshipCreation of legal relationship
9.9. CertaintyCertainty
10.10. Possible of performancePossible of performance
11.11. Enforceable by lawEnforceable by law

13. Performance of ContractPerformance of Contract
 It means when both the party fulfill their respective obligation. Performance ofIt means when both the party fulfill their respective obligation. Performance of
contract two type.contract two type.
1. Actual Performance1. Actual Performance::
 When the party have completed their obligation.When the party have completed their obligation.
2. Offer of Performance/Attempted :2. Offer of Performance/Attempted :
 When a promiser as made an offer of performance to the promisee and the offer hasWhen a promiser as made an offer of performance to the promisee and the offer has
not been accepted to promiser is not responsible for the performance nor does henot been accepted to promiser is not responsible for the performance nor does he
have by loss his rights under the contract.have by loss his rights under the contract.
 Offer of Performance also termed as – TENDEROffer of Performance also termed as – TENDER
 Essential of valid TenderEssential of valid Tender
 It must be unconditional – can’t but any father condition.It must be unconditional – can’t but any father condition.
 It must be of the whole obligation – fulfill the whole part of offer.It must be of the whole obligation – fulfill the whole part of offer.
 It must be made an proper time and proper place within working hours.It must be made an proper time and proper place within working hours.
 It must be made to a proper person.It must be made to a proper person.
 It must be made in the mode prescribe or reasonable mode – by which he prescribeIt must be made in the mode prescribe or reasonable mode – by which he prescribe
the mode like call before two days.the mode like call before two days.
 It may be mode to one of the several joint promises .It may be mode to one of the several joint promises .
 Person making the tender must be willing and be able to perform.Person making the tender must be willing and be able to perform.

14. Discharge of ContractDischarge of Contract
 When the rights and obligation created in a contract comes to an endWhen the rights and obligation created in a contract comes to an end
 A. By performance of contractA. By performance of contract
 B. By AgreementB. By Agreement
1. Novation1. Novation ( A new contract): –( A new contract): –
In case of novation one of the parties is replace by a new parties butIn case of novation one of the parties is replace by a new parties but
all the parties must agree to new contract.all the parties must agree to new contract.
2. Alternation:2. Alternation:
In case of alternation the term of the contract is altar with theIn case of alternation the term of the contract is altar with the
agreement of the both parties.agreement of the both parties.
15% inter 60 days15% inter 60 days
12% inter 30 days12% inter 30 days
TenderTender
3. Rescission ( Resigned ):3. Rescission ( Resigned ):
The agreement can be discharge by the consolation of the contract.The agreement can be discharge by the consolation of the contract.
A B

15. 4. Remission:4. Remission:
 Both the parties agree to under perform or lower perform of the contract.Both the parties agree to under perform or lower perform of the contract.
5. Waiver5. Waiver (to eliminate ) :(to eliminate ) :
 When both the parties eliminate the one of the firm (Bank) waiver the loan’s interest.When both the parties eliminate the one of the firm (Bank) waiver the loan’s interest.
6. Merger:6. Merger:
 When in a contract party having the interior right enter into a contract with the sameWhen in a contract party having the interior right enter into a contract with the same
party and for the same subject and he attains superior rightparty and for the same subject and he attains superior right contract get merge needcontract get merge need
contract.contract.
7. Owing to happening of an event :7. Owing to happening of an event :
 To happing of an event happens when some event on the both parties discharge itsTo happing of an event happens when some event on the both parties discharge its
contract incase of happing of the of a event with is not is the control of the party. Ex.-contract incase of happing of the of a event with is not is the control of the party. Ex.-
Factory in fireFactory in fire
C. By lapse of time:C. By lapse of time:
 When the contract can be discharge offer the time is lapse.When the contract can be discharge offer the time is lapse.
D. By operation of law:D. By operation of law:
 1. Death1. Death
 2. Insolvency: any of the party insolvent the contract will be discharge law has come2. Insolvency: any of the party insolvent the contract will be discharge law has come
to official assignees.to official assignees.
 3. Merger: When two company merge to gather then liability of A and B not may be A3. Merger: When two company merge to gather then liability of A and B not may be A
B their law has come.B their law has come.

16.  4. Loss of evident:4. Loss of evident: If any evidence has been lost then by the law youIf any evidence has been lost then by the law you
can get it.can get it.
 5. By breach of contract:5. By breach of contract: When one of the party of the contract do notWhen one of the party of the contract do not
perform there part of obligation as per terms and conditions of the contract itperform there part of obligation as per terms and conditions of the contract it
is taken breach of contract it is two typesis taken breach of contract it is two types
 A. Anticipatory:A. Anticipatory: Anticipatory breach is done before the actualAnticipatory breach is done before the actual
performance of the contract ( Actual)performance of the contract ( Actual)
 B. Actual breach:B. Actual breach: Actual breach is a the breach done on the date ofActual breach is a the breach done on the date of
performance.performance.
 6. By impossibility (dia-mager) of performance:6. By impossibility (dia-mager) of performance: legal remedies inlegal remedies in
case of breach of contract .case of breach of contract .
 I. Sue for damages.I. Sue for damages.
 II. Sue for the specific performance. ( painting)II. Sue for the specific performance. ( painting)
 III. Can rescind the Contract.III. Can rescind the Contract.
 IV. Sue for quantum merruit: As much as deserves in such case the breachIV. Sue for quantum merruit: As much as deserves in such case the breach
must be done by the promiser himself. (a write to ask)must be done by the promiser himself. (a write to ask)
 V. Sue for Injunction: As per the contract if not suppose to do somethingV. Sue for Injunction: As per the contract if not suppose to do something
and incase it does it other party can go to the court and sure for theand incase it does it other party can go to the court and sure for the
injunction.injunction.

17. Quasi ContractQuasi Contract
 The law imposes certain obligation of contractual nature of on one of theThe law imposes certain obligation of contractual nature of on one of the
parties and confores certain right in favor of the other party even thoughparties and confores certain right in favor of the other party even though
there is nether offer nor acceptance nether agreement nor any promisethere is nether offer nor acceptance nether agreement nor any promise
such contracts created by law and term is as Quasi contract.such contracts created by law and term is as Quasi contract.
 Kind of Quasi contract:Kind of Quasi contract:
 1. Supplies of necessaries1. Supplies of necessaries (to in competent parties)(to in competent parties)
 In case some one supplies necessaries to an in competent parties (minor,In case some one supplies necessaries to an in competent parties (minor,
Lunatic) the person supplies has the right to be conform B’s PropertiesLunatic) the person supplies has the right to be conform B’s Properties
Minor/ LunaticMinor/ Lunatic
B’s PropertiesB’s Properties
 2. Reimbursement of Payment2. Reimbursement of Payment (By an interested person ) –(By an interested person ) –
 In case a person pay amount or money which was to be legally paid byIn case a person pay amount or money which was to be legally paid by
someone else he must be reimbursed (Return) by person.someone else he must be reimbursed (Return) by person.
A BA B

18.  3. Liability of payment for non acidulous acts :3. Liability of payment for non acidulous acts :
 If any act has been done in favour of some one and the act is non –If any act has been done in favour of some one and the act is non –
graduitous act then the person must pay for the favour done to him. (Lift ofgraduitous act then the person must pay for the favour done to him. (Lift of
high-way)high-way)
 4. Responsibility of Finder of Goods:4. Responsibility of Finder of Goods:
 The person who finds lost goods of some one and keeps in his possessionThe person who finds lost goods of some one and keeps in his possession
who is known as finder of goods.who is known as finder of goods.
 The finder of goods will have to take care of goods as a it is his own goodsThe finder of goods will have to take care of goods as a it is his own goods
and will have to fine true owner and deliver the goods after taking legaland will have to fine true owner and deliver the goods after taking legal
express for keeping maintaining and preserving the goods.express for keeping maintaining and preserving the goods.
 Incase he does not get legal expenses he has a right to sell the goods andIncase he does not get legal expenses he has a right to sell the goods and
recover legal expenses.recover legal expenses.
 5. Payment of money by mistake or co - ercion :5. Payment of money by mistake or co - ercion :
 If any money has been paid to some one by mistake or co-ercion the personIf any money has been paid to some one by mistake or co-ercion the person
must to return by that person who gives him that money.must to return by that person who gives him that money.

19. Contract of AgencyContract of Agency
 Agent is a person who acts on behalf of some one and works within theAgent is a person who acts on behalf of some one and works within the
authority to given to him by the person who appoints him called asauthority to given to him by the person who appoints him called as
“Principle”“Principle”
 Any act done by the agent within the authority is the act of principle and theAny act done by the agent within the authority is the act of principle and the
principle for is liable for such act .principle for is liable for such act .
 The principle is not liable for any act of the agent done beyond the authority.The principle is not liable for any act of the agent done beyond the authority.
 The person who is competent to contract can appoint the agent but anyThe person who is competent to contract can appoint the agent but any
person can opt to become the agent of an in competent party but he will beperson can opt to become the agent of an in competent party but he will be
liable for all the consequence of the contract.liable for all the consequence of the contract.
 A miner can be appointed as an agent but the person who appoints a minerA miner can be appointed as an agent but the person who appoints a miner
as an agent he is responsible for all the act of miner.as an agent he is responsible for all the act of miner.
 Creation of an Agency:Creation of an Agency:
 I. Express AgencyI. Express Agency
 II. Implied AgencyII. Implied Agency
A) Agency by EstopelA) Agency by Estopel
B) Agency by Holding outB) Agency by Holding out
C) Agency by necessityC) Agency by necessity
 III. Agency by RatificationIII. Agency by Ratification

20.  I. Express Agency:I. Express Agency:
 It is created either in written on oral form.It is created either in written on oral form.
 II. Implied Agency:II. Implied Agency:
 It is created by conduct or situation or relationship.It is created by conduct or situation or relationship.
A) Agency by Estopel:A) Agency by Estopel:
If some one projecting himself to be the agent of a person and the personIf some one projecting himself to be the agent of a person and the person
who is projected as principle do not prevent him rather by his conduct hewho is projected as principle do not prevent him rather by his conduct he
makes the 3makes the 3rdrd
parties belief that person is his agent this is called agency byparties belief that person is his agent this is called agency by
estopel. (Ex- agent about permition of principle )estopel. (Ex- agent about permition of principle )
B) Agency by Holding out:B) Agency by Holding out:
In case of holding out the is pre affirmation about any person acting onIn case of holding out the is pre affirmation about any person acting on
behalf of the some one.behalf of the some one.
C) Agency by necessity:C) Agency by necessity:
Such agency is created under urgent or emergency. Situation and there isSuch agency is created under urgent or emergency. Situation and there is
no communication from the person on who behalf of some one act suchno communication from the person on who behalf of some one act such
agency is created by law.agency is created by law.
Ex- Transport driver sold the goods in necessary condition.Ex- Transport driver sold the goods in necessary condition.

21.  III. Agency by Ratification ( Conformation)III. Agency by Ratification ( Conformation)
 In case agent acts beyond the authority but his act is conform by theIn case agent acts beyond the authority but his act is conform by the
principle then such agency is called agency of ratification the wholeprinciple then such agency is called agency of ratification the whole
contract should be ratification.contract should be ratification.
90,000 Rs.90,000 Rs.
 A B
X
50,000 Rs. Adv.50,000 Rs. Adv.
40,000 Rs. After 30 day’s40,000 Rs. After 30 day’s
Agency by RatificationAgency by Ratification
1,00,000 Rs.1,00,000 Rs.

22. Duties of AgentDuties of Agent
1.1. Agent must act with in the authority given him by the principle.Agent must act with in the authority given him by the principle.
2.2. Agent must act honesty and with is skills knowledge and sincerity.Agent must act honesty and with is skills knowledge and sincerity.
3.3. Agent must take direction from principle in case of unforeAgent must take direction from principle in case of unfore
situation but in case of urgency and emergency. Situation thesituation but in case of urgency and emergency. Situation the
agent can take decision in favour of principle.agent can take decision in favour of principle.
4.4. The agent must maintain make account support by bills.The agent must maintain make account support by bills.
5.5. Agent must collect amount on behalf of principle.Agent must collect amount on behalf of principle.
6.6. Agent must not make secret profit .Agent must not make secret profit .
7.7. Agent must not pass secret information to any 3Agent must not pass secret information to any 3rdrd
Party to actParty to act
again to the principle.again to the principle.
8.8. Agent must not do miss conduct.Agent must not do miss conduct.
9.9. The agent must not make losses to his X-principle in case ofThe agent must not make losses to his X-principle in case of
termination of agency.termination of agency.

23. Right of an agentRight of an agent
 The agent as right to get remuneration after the completion.The agent as right to get remuneration after the completion.
 The agent has a right to be compensation for any losses in cured to him toThe agent has a right to be compensation for any losses in cured to him to
negligence of principle.negligence of principle.
 Right of liel –right to possessionRight of liel –right to possession
 Right of stoppage in transitRight of stoppage in transit
 Agent has right to ask for law full charge. Ex-OctroiAgent has right to ask for law full charge. Ex-Octroi
Termination of agencyTermination of agency
1.1. By Agreement.By Agreement.
2.2. Revocation by principleRevocation by principle
3.3. Revocation of rightRevocation of right
4.4. Performance of contractPerformance of contract
5.5. Expiry of timeExpiry of time
6.6. Death and insanityDeath and insanity
7.7. InsolvencyInsolvency
8.8. Destruction of subject matterDestruction of subject matter
9.9. Principle become alien enemyPrinciple become alien enemy
10.10. Dissolution of the companyDissolution of the company

24. Contract of IndemnityContract of Indemnity
 A contract by which one party premises to sure the other from lossA contract by which one party premises to sure the other from loss
caused to him by the conduct of the promiser himself or by thecaused to him by the conduct of the promiser himself or by the
conduct by any other person is called is contract of indemnity.conduct by any other person is called is contract of indemnity.
 The person who gives the indemnity is calledThe person who gives the indemnity is called indemnifierindemnifier & the& the
person to when the indemnity is given is called asperson to when the indemnity is given is called as indemnifiedindemnified oror
indemnity-holder.indemnity-holder.
 To indemnifier is means sure from losses.To indemnifier is means sure from losses.
Right of indemnity holderRight of indemnity holder
 The value of indemnity will be all damages & cost of litigationThe value of indemnity will be all damages & cost of litigation
atternally if the parties settle for a comprimise of any such soon theatternally if the parties settle for a comprimise of any such soon the
indemnity fire is would need to bear to be some to be aid under theindemnity fire is would need to bear to be some to be aid under the
compromise.compromise.

25. GuaranteeGuarantee
 A contact of Guarantee is contract to perform the promise orA contact of Guarantee is contract to perform the promise or
discharge the liability of a 3discharge the liability of a 3rdrd
person in case if his default the personperson in case if his default the person
who gives the guarantee is called aswho gives the guarantee is called as suretysurety the person is respect ofthe person is respect of
whose default the guarantee is give is calledwhose default the guarantee is give is called Principle debtorPrinciple debtor & the& the
person whose the guarantee is givenperson whose the guarantee is given CreditorCreditor a guarantee may bea guarantee may be
either oral or written.either oral or written.

CharacteristicCharacteristic
 There are three parties.There are three parties.
 The loan must exist and must be recoverableThe loan must exist and must be recoverable
 The primary liability will be principle debtor the liability surety isThe primary liability will be principle debtor the liability surety is
secondarysecondary
A B
C
Creditor Principle Debtor
Surety

26. Sales of Goods ActSales of Goods Act
 It is not necessary in contract of sale that the goods are delivered orIt is not necessary in contract of sale that the goods are delivered or
the payments are received at the time of.the payments are received at the time of.
 ““ One arty transfer to promises to transfer the property in goods toOne arty transfer to promises to transfer the property in goods to
another person against money.”another person against money.”
 SellersSellers
Characteristic of contract of seller:Characteristic of contract of seller:
1.1. There must be 2 parties those are different and distinct seller andThere must be 2 parties those are different and distinct seller and
buyer.buyer.
2.2. Subject matter must be inovalble goods.Subject matter must be inovalble goods.
 Goods means: inovable goods other actionable claim and moneyGoods means: inovable goods other actionable claim and money
(the debts which can be recovered through court )(the debts which can be recovered through court )
 Any thing which a part of land can be several or extract before orAny thing which a part of land can be several or extract before or
after the contract is moveable goods. Ex –Grass, Goal, old coins,after the contract is moveable goods. Ex –Grass, Goal, old coins,
Silver coins.Silver coins.

27. 3.3. Monetary Consideration:Monetary Consideration:
4. Transfer of property: Only general propertied are transferred not the special4. Transfer of property: Only general propertied are transferred not the special
property.property.
5. There must essential elements of valid contract.5. There must essential elements of valid contract.
Contract of sales:Contract of sales: it is not necessary in contract of sale the goods areit is not necessary in contract of sale the goods are
delivered and the payment are received at the time of transfer ofdelivered and the payment are received at the time of transfer of
property.property.
Delivery is 3 types:Delivery is 3 types:
(I)(I) Actual (time of sale)Actual (time of sale)
(II)(II) Symbolic (Key Car’s)Symbolic (Key Car’s)
(III)(III) Constructive (Coriour)Constructive (Coriour)
Sale on approval:Sale on approval:
GoodsGoods
1. Existing 2. Future 3. Contingent1. Existing 2. Future 3. Contingent
1.Specific 2.Acertained 3.Uncertained Generic1.Specific 2.Acertained 3.Uncertained Generic
Uncertained goods those goods which are sold by description.Uncertained goods those goods which are sold by description.
Future goods that can be manufactured procure or procure at a later date.Future goods that can be manufactured procure or procure at a later date.

28.  Contingent goods means that goods which is the subject to certainContingent goods means that goods which is the subject to certain
happing (may or may not be)happing (may or may not be)
 Immediate sale executedImmediate sale executed
 As a future Agreement to sale Executory just inAs a future Agreement to sale Executory just in
 Condition & WarrantyCondition & Warranty
 A condition stipulation (term) essential to main purpose of theA condition stipulation (term) essential to main purpose of the
contract the breach of which gives rise to a right the treat thecontract the breach of which gives rise to a right the treat the
contract as reputed (Cancel).contract as reputed (Cancel).
 A warranty is a stipulation (collateral parallel) to the main purpose ofA warranty is a stipulation (collateral parallel) to the main purpose of
the contract the breach of which gives right to a claim for damagesthe contract the breach of which gives right to a claim for damages
but not right to reject the goods and treat the contract reputiated.but not right to reject the goods and treat the contract reputiated.
 In term of money or debt time in never a conditionIn term of money or debt time in never a condition

29.  Implied conditions:Implied conditions:
1.1. Condition as to TitleCondition as to Title
2.2. Condition as to sale by descriptionCondition as to sale by description
3.3. Condition as to sale by sampleCondition as to sale by sample
4.4. Condition as to quality or fairnessCondition as to quality or fairness
5.5. Condition as to MerchantabilityCondition as to Merchantability
6.6. Condition as to whole sameness (goods to human)Condition as to whole sameness (goods to human)
7.7. Condition implied by custom.Condition implied by custom.
 Explanation:Explanation:
1.1. The seller must have title over the goods or ownership.The seller must have title over the goods or ownership.
2.2. The seller must supply the goods as per description.The seller must supply the goods as per description.
3.3. The seller must supply the goods as per the goods quality and requirement ofThe seller must supply the goods as per the goods quality and requirement of
buyer.buyer.
 Implied Warranty:Implied Warranty:
 Implied Warranty of guest possession.Implied Warranty of guest possession.
 Implied Warranty freedom of encumbrance.Implied Warranty freedom of encumbrance.
 Disclosure of dangerous nature of goods.Disclosure of dangerous nature of goods.
 Caveat – emptor –buyer because (Buyer be aware)Caveat – emptor –buyer because (Buyer be aware)
2

30. Unpaid SellerUnpaid Seller
 Unpaid seller is a person who not receive whole amount against the goodsUnpaid seller is a person who not receive whole amount against the goods
sold in case the seller has receive negotiable instrument agained the samesold in case the seller has receive negotiable instrument agained the same
and negotiable instrument has not be owner ed.and negotiable instrument has not be owner ed.
Right of Unpaid sellerRight of Unpaid seller
Against the goodsAgainst the goods Against the buyerAgainst the buyer
Where the property inWhere the property in
goods is transferredgoods is transferred
When the property inWhen the property in
goods is not transfergoods is not transfer
Right of lieRight of lie
Right of StoppleRight of Stopple
Right to re-saleRight to re-sale
With hold the goodsWith hold the goods
Stopple in transitStopple in transit
Conres and theConres and the
ContractContract
Can sue forCan sue for
damagesdamages
Can sue forCan sue for
price of goodsprice of goods

31. Negotiable Instrument (Act 1881)Negotiable Instrument (Act 1881)
 Transferable documentsTransferable documents
1.1. Pay to bearerPay to bearer
2.2. Pay on orderPay on order
3.3. Pay on demandPay on demand
4.4. DischargeDischarge
 Holder in due Course:Holder in due Course:
 Negotiable Instrument:Negotiable Instrument: A negotiable instrument is transferable it is writing on pieceA negotiable instrument is transferable it is writing on piece
of paper creating a right and can be transfer to any person .the person who takesof paper creating a right and can be transfer to any person .the person who takes
the document (valid, Jenunine (bonafide) and in good faith, for a certain value isthe document (valid, Jenunine (bonafide) and in good faith, for a certain value is
calledcalled HolderHolder in due course.The title of holder in due course is not deffectivein due course.The title of holder in due course is not deffective
even those title of the transfereven those title of the transfer is defective.is defective.
 Statutory negotiable instruments:Statutory negotiable instruments:
 Promissory NotePromissory Note
 Bill Of ExchangeBill Of Exchange
 ChequeCheque
 Promissory Note:Promissory Note: This is an instrument in writing containing an unconditionalThis is an instrument in writing containing an unconditional
undertaking signed by maker ,to pay a certain sum of money to a person on thisundertaking signed by maker ,to pay a certain sum of money to a person on this
demand.demand.
 *A= Payee, B=maker*A= Payee, B=maker
“ I promise to pay B or Order sum of
Rs. 10,0000/- on demand” A

32.  Characteristic:Characteristic:
 In writtenIn written
 Unconditional undertakingUnconditional undertaking
 Certain sumCertain sum
 Two partiesTwo parties
 Bill Of Exchange:Bill Of Exchange: Its an instrument in witting containing an unconditional order,Its an instrument in witting containing an unconditional order,
directing a person to pay a certain sum of money to a person or the bearer ofdirecting a person to pay a certain sum of money to a person or the bearer of
the instrument.the instrument.
 Characteristic:Characteristic:
 Instrument in writtenInstrument in written
 Three parties (Drawer A, Drawee X, Payee B)Three parties (Drawer A, Drawee X, Payee B)
 Certain sum of money.Certain sum of money.
 To a certain person.To a certain person.
Pune
11/11/11
After 90 day’s pay to ‘B’ or order a sum of Rs.10,00,000/- (Ten Lac only)
for the value received.
To, Accepted
X
Swargate, Pune
A

33. Cheque:Cheque:
 Cheque is also a bill of exchange drawn on specified banker and payable on demand .Cheque is also a bill of exchange drawn on specified banker and payable on demand .
 Dishonor of instrument:Dishonor of instrument:
 Non –acceptance –bill of exchange.Non –acceptance –bill of exchange.
 Non Payment –Acceptance for bill exchange within 48 hours after the presentation.Non Payment –Acceptance for bill exchange within 48 hours after the presentation.
 In case of bill of exchange 3 day’s in grass period but in Cheque its not happen.In case of bill of exchange 3 day’s in grass period but in Cheque its not happen.
 Cheque Dishonorment:Cheque Dishonorment:
 The cheque is ambiguous.The cheque is ambiguous.
 In sufficient funds.In sufficient funds.
 The cheque is present before the days.The cheque is present before the days.
 The cheque has been become stale.The cheque has been become stale.
 The cheque holder loss the cheque.The cheque holder loss the cheque.
 If the drawn of the cheque is insure or death.If the drawn of the cheque is insure or death.
 Advice the stop paymentAdvice the stop payment
 If the drawer become insolvent.If the drawer become insolvent.
 If by the order of court ( stop by the order of the court)If by the order of court ( stop by the order of the court)

34. Endorsements:Endorsements:
 In endorsement is the instruction from the person holding the instrument, to payIn endorsement is the instruction from the person holding the instrument, to pay
money to the person directed by him given on the notice , this is done by the holdermoney to the person directed by him given on the notice , this is done by the holder
signing on the face or back of the instrument. If this no. space eithersigning on the face or back of the instrument. If this no. space either
On face or back of the instrument can be endorsement on a price of paper and suchOn face or back of the instrument can be endorsement on a price of paper and such
endorsement are known “ Allonage ”endorsement are known “ Allonage ”
The person who endorses the instrument is called endorser and the person in whoThe person who endorses the instrument is called endorser and the person in who
favour the endorsement is done is called ‘endorsee’.favour the endorsement is done is called ‘endorsee’.
Type of Endorsement:Type of Endorsement:
1.1. Blank / General Endorsement:Blank / General Endorsement: only signature by endoser.(when father give the signonly signature by endoser.(when father give the sign
cheque.cheque.
2.2. Specific / FullSpecific / Full Endorsement:Endorsement: pay to X order and then sign it.pay to X order and then sign it.
3.3. Partial Endorsement:Partial Endorsement: This endorsement is done for the residial unpaid amounts.This endorsement is done for the residial unpaid amounts.
4.4. Restrictive endorsement:Restrictive endorsement: Pay to Mr. X only and then sign it. This instrument can notPay to Mr. X only and then sign it. This instrument can not
further endorsesedfurther endorsesed
5.5. Conditional endorsement:Conditional endorsement:
A)A) San Recourse: In case of san recourse the endorser is not liable on the instrumentSan Recourse: In case of san recourse the endorser is not liable on the instrument
Pay to X Rs.50,000/- being residual unpaid amount and then sign it.Pay to X Rs.50,000/- being residual unpaid amount and then sign it.
If is never done on the part payment amount.If is never done on the part payment amount.
Pay to Mr. X San Recourse
Sign

35.  B)B) Facultative:Facultative: Here the endorser gives up or abandons any of his rights.Here the endorser gives up or abandons any of his rights.
 C) San Frais:C) San Frais: In case of san frais theIn case of san frais the endorsee is not liableendorsee is not liable on the instrument foron the instrument for
any expenses or the liability.any expenses or the liability.
 D) Owing to happening of event:D) Owing to happening of event:
 Forged Endorsement:Forged Endorsement:
 It makes the instrument nullified (Value of instrument because zero)It makes the instrument nullified (Value of instrument because zero)
Pay Mr X if there is a war
( Sign )
Pay Mr. X if marries Y
( Sign)
Pay Mr. X notice of des-honourment waived.
( Sign )
Pay Mr. X san Frais
( Sign )