Unit 9 Legal Aspects of Business PYQ’s 17th Oct 2020 Shift 1

The correct answer is – Condition as to free from encumbrances

Condition, as to free from encumbrances, is not an implied condition in a contract of sale.

Key Takeaways

Express and Implied Conditions / Warranties: A Sale

Conditions and warranties may be express or implied.

Express conditions and warranties are which, are expressly provided in the contract. Implied conditions and warranties are those which are implied by law or custom; these shall prevail in a contract of sale unless the parties agree to the contrary.

Implied Conditions include:

1. Condition As To Quality Or Fitness

Generally, there is no implied condition as to the quality or fitness of the goods that are sold for a particular purpose. However, the condition as to the reasonable fitness of goods for a particular purpose may be implied on the part of the seller for which the buyer wants them. Following are the conditions to be satisfied:

a. If the buyer had made known to the seller the purpose of his purchase

b. and the buyer relied on the seller’s skill and judgment, and

c. seller’s business to supply goods of that description. [Section 16]

2. Condition As To Merchantability

This is implied only where the sale is by description and the goods should be of ‘merchantable quality’ i.e. the goods must be such as are reasonably saleable under the description by which they are known in the market. [Section 16(2)]

3. Conditions as To Wholesomeness

In the case of eatables and provisions, there is another implied condition that the goods shall be wholesome, in addition to the implied condition as to merchantability.

Important Note

Implied Warranties include:

1. Implied Warranty of Freedom from Encumbrances

• The buyer is entitled to a further warranty that the goods shall be free from any charge or encumbrance in favor of any third party not declared or known to the buyer before or at the time when the contract is made.
• If the buyer is required to discharge the amount of the encumbrance it shall be a breach of this warranty and the buyer shall be entitled to damages for the same.

Therefore, from the above explanation, we can conclude that Condition, as to free from encumbrances, is not an implied condition in a contract of sale.

The correct answer is – Assignment is the obvious mode of discharge of a contract

The assignment is not the obvious mode of discharge of a contract.

Key Takeaways

All agreements are not contract. Only those agreements which are enforceable by law are ‘contracts’.

Following are the essential requirements of a valid contract.

1. Offer and its acceptance ‘
2. Free consent of both parties
3. Mutual and lawful consideration for agreement
4. It should be enforceable by law. Hence, the intention should be to create a legal relationship. Agreements of social or domestic nature are not contracts
5. Parties should be competent to contract
6. An object should be lawful
7. Certainty and possibility of performance
8. The contract should not have been declared as void under the Contract Act or any other law.

Important Note

1. Performance:

• The contract is discharged when both parties fulfil their respective obligations as per the terms and conditions of the contract.
• Once the performance is completed, the contract comes to an end.

2. Agreement:

• The parties can mutually agree to terminate the contract by entering into a new agreement or by modifying the existing contract.
• This agreement may be in the form of a mutual release, rescission, or novation.

3. Impossibility:

• If the performance of the contract becomes impossible due to unforeseen circumstances or events beyond the control of the parties (such as natural disasters or government regulations), the contract is discharged.

4. Operation of Law:

• A contract can be discharged by the operation of law in certain situations.
• This includes cases such as death or bankruptcy of either party, supervening illegality, or frustration of the contract.

5. Breach:

• If one party fails to fulfil their obligations under the contract without any lawful justification, it is considered a breach of contract.
• The innocent party may then have the option to terminate the contract and seek remedies for the breach.

The correct answer is – File Notings in the process

File notings do not come under the definition of ‘information’ under the RTI Act 2005.

Key Takeaways

Section 2(f) of the RTI Act defines ‘Information’ as any material in any form, including records, documents, memos, e-mails, opinions, advice, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force.

The correct answer is – 65

Section 65 of the Information Technology Act of 2000, updated in 2008, stealing any digital asset or information is considered as cyber crime

Key Takeaways

Section 65:

Tampering with computer source documents: Whoever knowingly or intentionally conceals, destroys or alters or intentionally or knowingly causes another to conceal, destroy, or alter any computer source code used for a computer, computer programme, computer system, or computer network, when the computer source code is required to be kept or maintained by law for the time being in force, shall be punishable with imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with both.

The correct answer is – (B), (E) only

GST is considered to be the biggest tax reform in India since independence. It will help realize the goal of “One Nation-One Tax-One Market.” GST is expected to benefit all the stakeholders – industry, government, and consumer.

According to the Ministry of Finance, “GST will make India a common market with common tax rates and procedures and remove economic barriers.”

Key Takeaways

The features of GST 2017 are as follows:

• The State GST and Central GST shall be levied on all transactions of goods and services.
• The structure of Indian GST is dual taxation with Centre and State simultaneously levying it on a common base.
• GST is applicable to any ‘supply’ of Goods and Services or both used or intended to use in the course of business.
• GST is based on the principle of destination-based consumption so the SGST shall be transferred to the destination state in the form of IGST.
• Import of Goods is treated as Inter-State supplies and would be subject to IGST in addition to applicable Custom Duties.
• A registered person will be allowed to assess the tax payable under the GST laws and furnish a return for each tax period.
• Every registrant or dealers should be given a PAN-based TIN number that shall be common to both the State GST and Central GST.
• There are exemptions in Goods and Services to the applicability of GST like food (fruits and vegetables, cereals, meat, and fish, etc.), raw materials, tools/instruments (agricultural tools, handmade musical instruments, shovels, etc.), services provided by RBI or any foreign diplomatic mission in India, transportation of individuals via public transport, etc.

Therefore, Statement (B), (E) only are not the features of GST 2017 in India.

The correct answer is – (A), (E), (C), (D), (B)

The Indian Contract Act, 1872:

• The Indian Contract Act, 1872 defines the term Contract under its section 2(h) as “An agreement enforceable by law”.
• This Act is based upon the principles of English Common Law.
• All agreements are contracts if they are made by the free consent of parties that are involved in the contract, for a lawful consideration with a lawful object, and are not hereby expressed to be void.

Key Takeaways

The following are the correct sequence implied in the Indian Contract Act 1872:

1. Offer: According to the Indian Contract Act 1872, the proposal is defined in Section 2 (a) as “when one person will signify to another person his willingness to do or not do something (abstain) with a view to obtain the assent of such person to such an act or abstinence, he is said to make a proposal or an offer.”

2. Acceptance: The Indian Contract Act 1872 defines acceptance in Section 2 (b) as “When the person to whom the proposal has been made signifies his assent thereto, the offer is said to be accepted. Thus the proposal when accepted becomes a promise.”

3. Promise: Section 2 of the Indian Contract Act of 1872 defines what promises are- When someone expresses his willingness to do (or not to do) something, he is said to make a proposal. When the other person (to whom the proposal is made) accepts the proposal, the proposal becomes a promise.

4. Agreement: An agreement between private parties creating mutual obligations enforceable by law. The basic elements required for the agreement to be a legally enforceable contract are mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality. Agreement = Offer + Acceptance.

5. Contract: The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land.

Important Note

The objective of the Contract Act is to ensure that the rights and obligations arising out of a contract are honored and that legal remedies are made available to an aggrieved party against the party failing to honor his part of the agreement.

Therefore, option 4 is the correct answer.

The correct answer is – A – I, B – II, C – III, D – IV

A partnership is a type of business where two or more individuals come together to establish and run a business with the intention of making and sharing profits.

Key Takeaways

Therefore, it is clear from the above explanation that option 1) is the correct answer.

The correct answer is – Both (A) and (R) are true and (R) is the correct explanation of (A)

A trademark registration gives exclusive proprietary rights to the trademark owner. It is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others, and are used to claim exclusive proprietary rights of products or services.

Key Takeaways

1. A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.
2. A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods.
3. Some examples include brand names, slogans, and logos. The term “trademark” is often used in a general sense to refer to both trademarks and service marks.
4. Trademarks are generally considered a form of intellectual property and may or may not be registered.

Both (A) and (R) are true and (R) is the correct explanation of (A).

The correct answer is – (A), (B), (E) only

Right to Information (RTI) is an act that sets out rules and regulations regarding citizen’s right to information. It replaced the former Freedom of Information Act, 2002.

Key Takeaways

RTI Act 2005:

• The RTI Bill was passed in Parliament and come into force from October 12, 2005.
• The basic objective of the RTI Act is to empower the citizens, promote transparency and accountability in the working of the Government, contain corruption, and make our democracy work for the people in the real sense.
• Any citizen may request information about the activities of the Public authority i.e. Government authority.
• The information can be obtained within 30 days from the date of request in normal case and in the matter of life or liberty of a person, information can be obtained within 48 hours from the time of the request.
• Certain information is prohibited under Section 8.
• An appeal against the decision of the Central Information Commission or State Information Commission can be made to an officer who is senior in rank.
• There is a nominal application fee that is needed to be paid to get information under the RTI application.
• The nominal fee to get the information is Rs. 10 for every application as per Rule 3 of the RTI Rules, 2005.

Therefore, Statements (A), (B), (E) only is not correct about the RTI Act, 2005.