Business Laws

To start anything we must ensure that whatever business we are going to start it should have a legal entity, also no one makes fraud in business there are some laws for better and smooth business run.

The Business Laws are all about.
The Indian Contract Act,1872
The Sales of Goods Act,1930
The Indian Partnership Act,1932
The Limited Liability Partnership act,2008
The Companies Act,2013

And Various Legislations are enacted of the existing legislation. these legislation are updated and are amended with various time to time

The Indian Contract Act,1872

The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act regulating Indian contract law. The Act is based on the principles of English Common Law. It is applicable to all the states of India. It determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law. The Act as enacted originally had 266 Sections, it had a wide scope

1. Offer 2(a): When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.

2. Acceptance 2(b): When the person to whom the proposal is made, signifies his assent there to, the proposal is said to be accepted.

3. Promise 2(b): A Proposal when accepted becomes a promise. In simple words, when an offer is accepted it becomes a promise.

4. Promisor and promisee 2(c): When the proposal is accepted, the person making the proposal is called as promisor and the person accepting the proposal is called as promisee.

5. Consideration 2(d): When at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstains from doing or promises to do or to abstain from doing something such act or abstinence or promise is called a consideration for the promise. The price paid by one party for the promise of the other Technical word meaning QUID-PRO-QUO i.e. something in return.

6. Agreement 2(e): Every promise and set of promises forming the consideration for each other. In short,

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7. Contract 2(h): An agreement enforceable by Law is a contract.

Therefore, there must be an agreement and it should be enforceable by law.

8. Reciprocal Promises 2(f): Promises which form the consideration or part of the consideration for each other are called 'reciprocal promises'.

9. Void agreement 2(g): An agreement not enforceable by law is void.

10. Voidable contract 2(i): An agreement is a voidable contract if it is enforceable by Law at the option of one or more of the parties there to (i.e. the aggrieved party), and it is not enforceable by Law at the option of the other or others.

11. Void contract 2(j): A contract becomes void when it ceases to be enforceable by law.

The Sales of Goods Act,1930

The Indian Sale of Goods Act, 1930 is a Mercantile Law, which came into existence on 1 July 1930, during the British Raj, borrowing heavily from the Sale of Goods Act 1893. It provisions for the setting up of contracts where the seller transfers or agrees to transfer the title (ownership) in the goods to the buyer for consideration. It is applicable all over India, except Jammu and Kashmir. Under the act, goods sold from owner to buyer must be sold for a certain price and at a given period of time. The act was amended on 23 September 1963 and was renamed to the Sale of Goods Act, 1930. It is still in force in India

The definitions as per Section II (s.2 Of Sale of Goods Act 1930) of the Act are as follows:

Contract

A Contract of Sale is:an offer to buy for a price, or An offer to sell goods for a price, and the acceptance of such an offer.A contract may provide for:the immediate delivery of the goods, or

immediate payment of the price, orthe immediate delivery of the goods and payment both, or

for the delivery or payment by installments, or that the delivery or payment or both shall be postponed.per the Section 5 sub-clause (2) - Subject to the provisions of any law for the time being in force, a contract of sale may be made-

in writing or

by word of mouth, or

partly in writing and partly by word of mouth or

maybe implied from the conduct of the parties.

Goods

Goods are every kind of moveable property other than actionable claims and money, and include:

Stock and shares,

Growing crops,

Grass, and

Things attached to or forming part of the land which is agreed to be severed before sale or under the contract of sale.

Future goods are goods that are to be:

manufactured, or

produced, or

acquired, by the seller after making of the contract of sale

According to the act, the goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods and there may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen. Whereby a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.

The Indian Partnership Act, 1932

The Indian Partnership Act, 1932 was enacted in India in 1932. The Indian Partnership Act 1932 defines a partnership as a relation between two or more persons who agree to share the profits of a business run by them all or by one or more persons acting for them all. Section 27 of the Indian Contract Act, 1872, such contracts may provide that a partner shall not carry on any business other than that of the firm while he is a partner.

The Limited Liability Partnership act,2008

The Limited Liability Partnership Act, 2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India. Unlike the general partnerships in India, LLP is a body corporate and legal entity separate from its partners, have Perpetual succession and any change in the partners of a LLP shall not affect the existence, rights or liabilities of the LLP.


LLP is a corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, as a hybrid of companies & partnerships providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.[2] LLP is a legal entity partnership act.

Separate Legal Entity- Continue its existence irrespective of changes in partners,
LLP itself can enter into contracts and hold properties,
Partners' Liability limited to the agreed contribution,
Professional & Non-professional (Businessmen), both can set up LLP.

The Companies Act,2013

The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.

Reason for PubG banned in India!

Ministry of Information & Technology bans PUBG and 118 other mobile applications

Government blocks 118 mobile apps which are prejudicial to sovereignty and integrity of India, Defence of India, Security of State and Public Order: Govt of India

About the Game

PlayerUnknown's Battlegrounds (PUBG) is an online multiplayer battle royale game developed and published by PUBG Corporation, a subsidiary of South Korean video game company Bluehole.

Is it a Chinese app?

The answer is yes, the PUBG Mobile game is developed by the Chinese company Tencent, which automatically makes it a Chinese application. However, the PUBG game does not have a Chinese origin as the game is made by the Korean gaming company, Bluehole. Interestingly, Tencent has bought a 10 per cent stake in Bluehole, which might raise some eyebrows. However, the same company has an investment in major gaming companies including Riot Games, Epic Games (Fortnite creator), Ubisoft, Activision Blizzard and more

Reason for the Game to be banned

   The reason for the ban goes back to the political tension between India and China arising out of the Galwan Valley attacks that happened in the month of June.The government is considering a ban on the battle royale format game over data security concerns. While the fate of the game is not known, it is always good to be prepared. In case, the game gets banned in India, gamers need not worry as there are other worthy alternatives available. One of it reason can be national security.

Read the below IT Act,2000 to be understood for why such decsion are taken by the govt.

The Information Technology Act, 2000

THE INFORMATION TECHNOLOGY ACT, 2000

1 Short title, extent, commencement and application. -

(1) This Act may be called the Information Technology Act, 2000.

(2) It shall extend to the whole of India and, save as otherwise provided in this Act, it applies also to any offence or contravention thereunder committed outside India by any person.

(3) It shall come into force on such date ¹ as the Central Government may, by notification, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.

² [(4) Nothing in this Act shall apply to documents or transactions specified in the First Schedule: Provided that the Central Government may, by notification in the Official Gazette, amend the First Schedule by way of addition or deletion of entries thereto.

(5) Every notification issued under sub-section (4) shall be laid before each House of Parliament.]

(a) a negotiable instrument (other than a cheque) as defined in section 13 of the Negotiable Instruments Act, 1881 (26 of 1881);

(b) a power-of-attorney as defined in section 1A of the Powers-of-Attorney Act, 1882 (7 of 1882);

(c) a trust as defined in section 3 of the Indian Trusts Act, 1882 (2 of 1882);

(d) a Will as defined in clause (h) of section (2) of the Indian Succession Act, 1925 (39 of 1925), including any other testamentary disposition by whatever name called;

(e) any contract for the sale or conveyance of immovable property or any interest in such property;

(f) any such class of documents or transactions as may be notified by the Central Government in the Official Gazette."

2 Definitions. -

(1) In this Act, unless the context otherwise requires,-

(a) "access", with its grammatical variations and cognate expressions, means gaining entry into, instructing or communicating with the logical, arithmetical or memory function resources of a computer, computer system or computer network;

(b) "addressee" means a person who is intended by the originator to receive the electronic record but does not include any intermediary;

(c) "adjudicating officer" means an adjudicating officer appointed under sub-section (1) of section 46;

(d) "affixing ³ [electronic signature]", with its grammatical variations and cognate expressions means adoption of any methodology or procedure by a person for the purpose of authenticating an electronic record by means of ³ [electronic signature];

(e) "appropriate Government" means as respects any matter,-

(i) enumerated in List II of the Seventh Schedule to the Constitution;

(ii) relating to any State law enacted under List III of the Seventh Schedule to the Constitution, the State Government and in any other case, the Central Government;

(f) "asymmetric crypto system" means a system of a secure key pair consisting of a private key for creating a digital signature and a public key to verify the digital signature;

(g) "Certifying Authority" means a person who has been granted a licence to issue a ³ [electronic signature] Certificate under section 24;

(h) "certification practice statement" means a statement issued by a Certifying Authority to specify the practices that the Certifying Authority employs in issuing ⁴ [Electronic Signature] Certificates;

⁵ [(ha) "communication device" means cell phones, personal digital assistance or combination of both or any other device used to communicate, send or transmit any text, video, audio or image;]

(i) "computer" means any electronic, magnetic, optical or other high-speed data processing device or system which performs logical, arithmetic and memory functions by manipulations of electronic, magnetic or optical impulses, and includes all input, output, processing, storage, computer software or communication facilities which are connected or related to the computer in a computer system or computer network;

⁶ [(j) "computer network" means the inter-connection of one or more computers or computer systems or communication device through-

(i) the use of satellite, microwave, terrestrial line, wire, wireless or other communication media; and

(ii) terminals or a complex consisting of two or more inter-connected computers or communication device whether or not the inter-connection is continuously maintained;]

(k) "computer resource" means computer, computer system, computer network, data, computer data base or software;

(l) "computer system" means a device or collection of devices, including input and output support devices and excluding calculators which are not programmable and capable of being used in conjunction with external files which contain computer programmes, electronic instructions, input data and output data that performs logic, arithmetic, data storage and retrieval, communication control and other functions;

(m) "Controller" means the Controller of Certifying Authorities appointed under sub-section (l) of section 17;

(n) "Cyber Appellate Tribunal" means the Cyber ⁷ [***] Appellate Tribunal established under sub-section (1) of section 48;

⁸ [(na) "cyber cafe" means any facility from where access to the internet is offered by any person in the ordinary course of business to the members of the public;]

⁸ [(nb) "cyber security" means protecting information, equipment, devices computer, computer resource, communication device and information stored therein from unauthorised access, use, disclosure, disruption, modification or destruction;]

(o) "data" means a representation of information, knowledge, facts, concepts or instructions which are being prepared or have been prepared in a formalised manner, and is intended to be processed, is being processed or has been processed in a computer system or computer network, and may be in any form (including computer printouts magnetic or optical storage media, punched cards, punched tapes) or stored internally in the memory of the computer;

(p) "digital signature" means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3;

(q) "Digital Signature Certificate" means a Digital Signature Certificate issued under sub-section (4) of section 35;

(r) "electronic form", with reference to information, means any information generated, sent, received or stored in media, magnetic, optical, computer memory, micro film, computer generated micro fiche or similar device;

(s) "Electronic Gazette" means the Official Gazette published in the electronic form;

(t) "electronic record" means data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche;

Can COVID-19 PANDEMIC OR LOCKDOWN be the Excuse to the Businessmen as An Act Of God?

Force Majeure/Act of God

An act of God is a phrase used to describe an event outside of human control, such as a natural disaster.

Force majeure is a French term meaning “superior force”. It is a common contractual clause that essentially negates the liability of a party when an extraordinary event or circumstance takes place beyond the control of the parties. The examples of the same can be war, riots, strikes, etc. Other than that there could be a natural phenomenon like earthquakes, hurricanes, floods, etc. which fall under the common bracket of ‘Act of God’. This clause prevents the parties from fulfilling their obligations under the contract.

Order 7 Rule 11(a) – Rejection of plaint where it does not disclose a cause of action.

As per Section 26 of the Code of Civil Procedure, 1908, every suit has to be instituted by the presentation of a plaint or in such other manner as may be prescribed. As per Black’s law dictionary, a plaint is a private memorial tendered in open court to the judge, where the party injured sets forth his cause of action.

A cause of action is a bundle of facts which are required to be proved for obtaining relief (Mayar (H.K.) Ltd. v. Owners & Parties, Vessel M.V. Fortune Express; (2006) 3 SCC 100). In other words, a bundle of facts, which is necessary for the plaintiff to prove in order to succeed in the suit (Bloom Dekor Ltd. v. Subhash Himatlal Desai and Ors.; (1994) 6 SCC 322).

In a generic and wide sense “cause of action” means every fact, which it is necessary to establish to support a right to obtain a judgment(Sadanandan Bhadran v. Madhavan Sunil Kumar; 1998 CriLJ 4066).

“cause of action” consists of a bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise (South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. and Ors.; 1996 (3) SCR 405).

In case, a plaint fails to disclose a cause of action, the plaint is liable to be rejected under Order VII Rule 11(c) of the Code of Civil Procedure, 1908. In the present movie, the Defendant took the said defence as no cause of action against the religious heads were made out on account of the earthquake being caused to the protagonist’s shop. However, the said defence was sort of rejected in the movie. As per us, it will be accepted in the real world.

EFFECT ON BUSINESSMEN 

Most of the businessmen are disturb because of this pandemic disease Covid-19 even the small vendors in a great shuffle in such there comes a law for those who have given or taken responsibility for the agreement for the supply of products or goods for a period of time or within the period of time. many are in the contract in which they have given their consent which can not be revoked until both the acceptor and proposer are agreed on a particular agreement. 

CONTRACT LAW

In the law of contracts, an act of God may be interpreted as an implied defense under the rule of impossibility or impracticability. If so, the promise is discharged because of unforeseen occurrences, which were unavoidable and would result in insurmountable delay, expense, or other material breach.

Under the English common law, contractual obligations were deemed sacrosanct, so failure to honour a contract could lead to an order for specific performance or internment in a debtor's prison. In 1863, this harsh rule was softened by the case of Taylor v Caldwell which introduced the doctrine of frustration of contract, which provided that "where a contract becomes impossible to perform and neither party is at fault, both parties may be excused their obligations". In this case, a music hall was burned down by act of God before a contract of hire could be fulfilled, and the court deemed the contract frustrated.

In other contracts, such as indemnification, an act of God may be no excuse, and in fact, may be the central risk assumed by the promisor—e.g., flood insurance or crop insurance—the only variables being the timing and extent of the damage. In many cases, failure by way of ignoring obvious risks due to "natural phenomena" will not be sufficient to excuse the performance of the obligation, even if the events are relatively rare: e.g., the year 2000 problem in computers. Under the Uniform Commercial Code, 2-615, failure to deliver goods sold may be excused by an "act of God" if the absence of such act was a "basic assumption" of the contract, and the act has made the delivery "commercially impracticable".

Recently, human activities have been claimed to be the root causes of some events previously considered natural disasters. In particular:

Geothermal injections of water provoking earthquakes (Basel, Switzerland, 2003)

Drilling provoking mud volcano (Java, 2008)

Such events are possibly threatening the legal status of acts of God and may establish liabilities where none existed until now. Another issue in the law of contracts is whether the terms of contracts be complied upon in the case of an epidemic.

As a general principle of act of God,epidemic can be classified as an act of God if the epidemic was unforeseeable and renders the promise discharged if the promisor cannot avoid the effect of the epidemic by the exercise of reasonable prudence, diligence, and care, or by the use of those means which the situation renders reasonable to employ.

TORT LAW

An act of God is an unforeseeable natural phenomenon.

1. which involves no human agency
2. which is not realistically possible to guard against
3. which is due directly and exclusively to natural causes and
4. which could not have been prevented by any amount of foresight, plans, and care.