Legal
Aspects Of
Business
Presented By:
Aayushi Raj (B2123001)
CONTENTS
●
●
●
●
●
●
●
●
●
●
Elements of a valid contract
Difference between Agreement and Contract
Case 1
Case 2
Rights of consumers
Consumer redressal
Case 3
Case 4
Difference between CP act 1986 and 2019
Conditions precedent to file cases in consumer forum
Elements of a valid contract according to
Indian Contract Act, 1872
●
●
●
●
●
●
●
●
Offer and Acceptance: For a contract to be valid, there must be an offer made by one party and accepted by
the other.
Intention to create legal relations: For a contract to be legally binding, there must be an intention to create a
legal relationship.
Competent parties: The parties involved must be legally competent to enter into a contract.
Free consent: The parties must have freely consented to the terms of the contract without any kind of
coercion, undue influence, misrepresentation or fraud.
Lawful consideration: The contract must be supported by lawful consideration, i.e., something of value must
be exchanged between the parties.
Lawful object: The object of the contract must be lawful, i.e., it must not be illegal, immoral, or opposed to
public policy.
Certainty and possibility of performance: The terms of the contract must be certain and not vague or
ambiguous and must be capable of being performed.
Legality: The contract should not be contrary to any existing law or public policy.
SL.NO.
1
BASIS
Meaning
AGREEMENT
CONTRACT
The meaning of agreement can be
understood as an acceptance of an offer
given by one party to another.
A contract can be defined as
an agreement that is
enforced by law.
Definition
Section 2(e) of the Indian Contract Act,
1872 defines an agreement as, “Every
promise and every set of promises,
forming the consideration for each other,
is an agreement.”
Section 2(h) of the Indian
Contract Act, 1872 defines a
contract as, “an agreement
enforceable through the
law.”
Elements
Agreement = Offer + Acceptance
Contract = Agreement +
Enforceable by Law
Written Form
The agreement can not necessarily be in
written form.
A contract is normally
written and registered.
2
3
4
Scope
An agreement has a wider scope than a
contract.
A contract has a narrower
scope as compared to an
agreement.
6
Risk
It involves a higher risk factor because it is
not enforceable by law.
A contract is abided by the
law, so it ensures a low-risk
factor.
7
One in Another
All agreements cannot be considered a
contract.
All contracts can be
considered an agreement.
Legal
Obligation
An agreement does not create a legal
obligation.
Contracts are meant to
create a legal obligation.
Consideration
Agreements can be formed without
consideration.
There should be some
consideration to form a
contract.
5
8
9
Sample Cases & Judgement
Details
Case 1
Case 2
Name & Title
Katta Sujata Reddy vs M/S
Siddamsetty Infra Projects
Pvt. Ltd. & Ors
Universal Petro Chemicals
Ltd vs BP Plc. and others
Case Number
5822 of 2022
3128 of 2009
Forum
State of Telangana
Jurisdiction Court
Supreme Court of India
Date & Year of Judgement
25-08-2022
Supreme Court Of India
Case 1: Katta Sujata Reddy vs M/S Siddamsetty Infra Projects Pvt. Ltd. & Ors
Judgement:
1.
2.
3.
4.
New Delhi, August 26, 2022, Referring to the 2018 amendment of the Specific Relief Act,1963, the
Supreme Court has opined that specific performance is not codified as an enforceable right which is
not dependent anymore on equitable principles expounded by judges, rather it is founded on
satisfaction of the requisite ingredients as provided under the Act.
Placing reliance upon the amended section 10 of the Specific Relief Act, which provides that specific
performance of a contract shall be enforced by the court subject to the provisions contained in sections
112 , 14 and 16, the Larger Bench of Chief Justice N.V. Ramana, Justice Krishna Murari and Justice
Hima Kohli asserted that this provision, which remained in the realm of the Courts discretion, was
converted into a mandatory provision, prescribing a power the Courts had to exercise when the
ingredients were fulfilled.
In this matter, Siddamsetty Infra Projects Pvt. Ltd- respondent, had filed a suit for specific performance
against the appellants, Smt. Katta Sujatha Reddy and Smt. Kamireddy Geetha Reddy, who were
respondents respectively, among others in the suit.
One late D Narayana, predecessor in interest of the second and third respondents, was the owner of
an agricultural land situated in Budvel Village in Hyderabad. The appellants acquired a certain extent
of the land from the aforesaid predecessor interest through an agreement.
Case 2: Universal Petro Chemicals Ltd vs BP Plc. and others
Judgement:
1.
2.
3.
4.
New Delhi, February 21, 2022, While hearing an appeal relating to consequences of termination of a
collaboration agreement with foreign company for manufacture and marketing of lubricants in India, the
Supreme Court has refused to grant compensation in lieu of specific performance to the Universal
Petro Chemicals, as it was not specifically claimed in the plaint.
A Division Bench of Justice L. Nageswara Rao and Justice B.R Gavai therefore observed that
Universal Petro Chemicals Appellant is not entitled to claim damages for the period between August
24, 2005, and December 31, 2009.
Going by the background of the case, the Appellant entered into a collaboration agreement with third
Respondent, which is a German company, by which the Appellant had to manufacture lubricants using
the formulation of Aral and market the same in India.
In the year 2002, Veba Oil, the holding company of third Respondent was acquired by BP Plc. first
respondent a UK entity, who was also the holding company for Castrol India second respondent
THE CONSUMER PROTECTION BILL, 2019
PassedRajya Sabha
IntroducedLok Sabha
July 8,
2019
July 30,
2019
Aug 6,
2019
PassedLok Sabha
The Consumer Protection Bill, 2019 was introduced in Lok Sabha by the Minister of Consumer
Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on July 8, 2019. The Bill replaces the
Consumer Protection Act, 1986.
Consumers & Rights
A consumer is the one who:
●
●
Buys any goods or services for a
consideration, which has been paid or
promised or partly paid and partly
promised, or under any system of
deferred payment also includes the user
with approval of such goods or beneficiary
of services
As per Consumer Protection Act 2019, the
expression “buys any goods” and ‘hires or
avails any services” includes offline or
online transactions through electronic
means or by teleshopping or direct selling
or multi-level marketing.
6 Right as defined by the bill are,
right to:
Safety
Be
informed
Be heard
Seek
redressal
Choose
Consumer
awareness
Rights of Consumers
Right to Safety- The right to be
protected against the marketing
of goods and services, which are
hazardous to life and property
Right to be heard- The right to be
heard and to be assured that
consumer’s interests will receive
due consideration at appropriate
fora.
Right to be informed- The right to
be informed about the quality,
quantity, potency, purity, standard
and price of goods or services, as the
case may be so as to protect the
consumer against unfair trade
practices.
Right to Redressal- The right to
seek redressal against unfair trade
practices or restrictive trade
practices
or
unscrupulous
exploitation of consumers.
Right to choose- The right to be
assured, wherever possible,
access to a variety of goods and
services at competitive prices.
Right to Consumer EducationConsumer education is the
preparation of an individual to
be capable of making informed
decisions when it comes to
purchasing products or services
Consumer Redressal
(Chap. IV, Consumer dispute redressal Agency)
Establishment of Consumer Disputes Redressal Commission
These are quasi-judicial bodies established under the Act to provide simple, speedy and inexpensive
redressal to the grievances of the consumers. These have been established at three levelsDistrict, State and National known as:
•
•
•
District Consumer Disputes Redressal Commission or District Commission
State Consumer Disputes Redressal Commission or State Commission
National Consumer Disputes Redressal Commission or National Commission
a) Each District Commission shall consist of— a President; and not less than two and not more
than such number of members as may be prescribed, in consultation with the Central
Government.
b) Each State Commission shall consist of— a President; and not less than four or not more than
such number of members as may be prescribed in consultation with the Central Government.
c) The National Commission shall consist of— a President; and not less than four and not more
than such number of members as may be prescribed.
Details
Name & Title
Case Number
Forum
Case 3
Bihar State Electricity Board vs
Iceberg Industries Ltd. and
Ors.
Case 4
Economic Transport
Organization, Delhi v. Charan
Spinning Mills Pvt. And others
7649-7651 of 2019
5611 0f 1999
District Forum
District Forum
Jurisdiction Court
Supreme Court
Supreme Court
Date and Year of Judgement
April 27, 2020
February 17, 2010
Case 3: Bihar State Electricity Board vs Iceberg Industries Ltd. and Ors.
Judgement:
1. The company had entered into an agreement for supply of electricity with the Appellant
Board.
2. This was for supply of high-tension electricity connection for setting up of a brewery.
3. The Bill was raised by the Appellant towards AMG and DPS.
4. The company did not make payment thereof within the prescribed date.
5. Three disconnection notices on account of default in payment of AMG as also energy
charges were issued by the Board.
6. The company made a representation for liquidating their dues on account of AMG in ten
monthly instalments citing certain business-related difficulties.
7. The company’s request for grant of instalments to liquidate their dues was ultimately
accepted by the Board and to that effect an agreement was executed between Company
and the Board for liquidation of the outstanding dues in ten instalments.
Case 4: Economic Transport Organization, Delhi v. Charan Spinning Mills private limited and
others.
Facts: This case contains two Respondents and one appellant. The first Respondent is a manufacturer of
cotton yarn. Later, the first Respondent signed a insurance policy which was considered to be 2nd
Respondent in the case to cover the risks of cotton yarn. 1st Respondent carried the cotton yarn to the
Appellant. During this time, the vehicle met with an accident and all the cotton yarn was destroyed. With this
the first and second Respondent filled a complaint against the Appellant before the District Consumer
Redressal Forum. Now, the same question arises whether carriage act is included under the provisions of
consumer act?
Issue: Whether Section 9 of carriage’s act is included into consumer protection Act?
Decision: The term suit is missing in both Sec. 9 of Carriers Act as well as in consumer protection act.
Moreover, it does not state that suit has same concept as of mentioned in Civil Procedure Court. Same
principle has been stated as of above case that is of Patel Roadways Limited. v. Birla Yamaha Limited. As
national commission is said to have a summary proceeding it is still considered to be as a suit.
Sl. No.
Basis
CP act, 2019
Jurisdiction
The jurisdiction under Consumer
Protection Act 1986 was District
Forum (up to ₹20 Lakhs), State
Commission (₹20 Lakhs to ₹1 Crore),
and National Commission (above ₹1
Crore).
The jurisdiction under Consumer
Protection Act 2019 is District
Commission (up to ₹1 Crore), State
Commission (₹1 Crore to ₹10 Crore),
and National Commission (₹10 Crore
and above).
Regulator
During this Act, no such provision
was there.
Under this Act, a Central government
protection authority is to be formed.
1
2
CP act, 1986
3
MRP/Purcha Under this Act, MRP was a criterion
se Price
for deciding the jurisdiction.
Under this Act, the discounted price
or actual purchase price is used to
decide jurisdiction.
4
Under this Act, there was no
E-Commerce
mention of E-Commerce.
Under this Act, every provision
applicable to the direct seller is also
applicable to the E-Commerce seller.
5
6
7
8
No such provision was there under
this Act.
Under this Act, the court can refer to
a settlement through mediation.
Unfair Terms
No such provision was there under
and
this Act.
Conditions
Under this Act, the State Commission
and the National Commission have
the power to declare a contract null
and void if it is unfair.
Mediation
Authority
Under this Act, there were three
authorities; viz., District Forum,
State Commission, and National
Commission.
Under this Act, there are three
authorities; viz., District Commission,
State Commission, and National
Consumer Dispute Redressal
Commission.
Composition
of State
Commission
Under Consumer Protection Act
1986, the State Commission was
composed of one president and two
other members.
Under Consumer Protection Act 2019,
the State Commission is composed of
one president and four other
members.
Conditions precedent to file cases in Consumer Forum
The conditions may vary depending on the specific laws of the jurisdiction in which the case is being
filed. However, some common conditions that must be met include the following:
1. The consumer must have purchased the goods or services in question from the defendant or have
otherwise entered a contract with the defendant.
2. The person filing the case, known as the "consumer," must have suffered some form of injury or
loss as a result of the actions of the other party, known as the "defendant." due to unfair or
restrictive trade practice of a trader or service provider, this injury or loss could be financial,
physical, or emotional in nature.
3. The article purchased by a consumer is defective or the services availed of by a consumer suffer
from any deficiency
4. The consumer must file the case within a certain time frame, known as the "statute of limitations,"
which varies depending on the jurisdiction and the nature of the case.
5. A trader or service provider has charged for the goods or for the service mentioned in the
complaint a price in excess of the stipulated price.
6. The consumer must be able to prove that the defendant's actions were negligent, fraudulent,
unlawful, or hazardous to life and safety, when used, are being offered for sale to the public.
Thank You!