Table Of ContentDedicated
to
my
mentor,
Prof.
D.P.S.
Verma
Former
Professor,
Department
of
Commerce
Delhi
School
of
Economics,
University
of
Delhi
Foreword
The
legal
aspects
of
business
form
a
major
part
of
the
business
environment
as
they
reflect
the
policy
structure
and
guidelines
of
the
government.
The
legal
regime
seeks
to
ensure
that
every
business
concern
functions
in
accordance
with
the
statutory
framework
of
the
country.
Every
enterprise,
big
or
small,
must
conform
to
the
legal
standards
set
up
for
its
undisputable
functioning.
This
is
imperative
to
ensure
good
corporate
governance
too.
In
India,
there
is
a
long
list
of
regulatory
mechanisms
relating
to
the
legal
aspects
of
business.
All
these
enactments
play
an
important
role
in
the
country’s
economic
development.
An
entrepreneur
must
take
into
account
the
regulatory
structure
of
the
country
to
ensure
the
sustainability
of
the
business
as
well
as
smooth
and
efficient
performance
of
the
firm.
Moreover,
in
recent
times,
a
need
has
been
felt
to
prohibit
anticompetitive
business
practices
and
to
regulate
legal
issues
such
as
mergers
and
acquisitions.
In
fact,
the
list
of
legislations
in
the
business
domain
is
so
long
that
it
seems
almost
impossible
to
cover
them
under
one
landscape.
Legal
Aspects
of
Business
by
Ravinder
Kumar
concentrates
on
the
major
business
and
corporate
legislations
such
as
The
Indian
Contract
Act,
1872,
The
Negotiable
Instruments
Act,
1881,
The
Sale
of
Goods
Act,
1930,
The
Partnership
Act,
1932,
The
Consumer
Protection
Act,
1986,
The
Information
Technology
Act,
2000,
The
Right
to
Information
Act,
2005,
The
Limited
Liability
Partnership
Act,2008,
The
SEBI
Act,
The
Companies
Act,
2013,
and
the
laws
relating
to
environment
and
intellectual
property.
These
legislations
are
central
to
any
business.
On
the
whole,
the
book
is
a
genuinely
good
attempt
and
I
am
sure
that
its
lucidity
will
hold
the
interest
of
management
students
and
other
professionals
who
are
interested
in
understanding
the
legal
aspects
of
business.
Prof.
(Dr)
Ranbir
Singh
National
Law
University,
Delhi
Preface
Legal
aspects
of
business
imply
interface
of
law
with
business.
As
every
business
is
supposed
to
comply
with
the
regulations
in
force
to
create
wealth,
it
is
imperative
on
the
part
of
those
who
run
it
to
appreciate
the
issues
pertaining
to
legality
for
both
kinds
of
activities;
run-of-the-mill
and
out-of-box.
Needless
to
mention
knowledge
of
legal
aspects
of
business
is
crucial
for
all
stakeholders
of
business
including
people
working
in
different
functional
areas
of
management.
Keeping
this
in
mind,
the
present
book,
in
its
fourth
edition
now,
has
been
designed
to
empower
budding
business
managers
to
deal
with
legal
issues,
confronting
their
decisions.
The
author
expresses
his
gratitude
to
the
readers
for
their
overwhelming
response
to
the
preceding
volume,
Legal
Aspects
of
Business
3e.
Their
response
has
encouraged
both,
the
author
and
the
publisher
to
bring
a
revised
and
modified
edition
in
a
relatively
shorter
span
of
time,
keeping
in
view
the
recent
developments
in
the
sphere
of
corporate
laws.
This
revised
edition
has
been
rationalized
by
incorporation
of
some
of
the
major
developments
in
the
sphere
of
legal
aspects
of
business
while
maintaining
the
hallmark
features
of
the
previous
edition.
It
gives
me
immense
pleasure
to
introduce
to
you
the
fourth
edition
of
the
book,
which
has
been
refined
adequately
with
the
aim
to
explain
the
core
legal
aspects
of
business
in
a
logical,
concise,
and
yet
lucid
manner
by
using
a
fresh
and
novel
approach
to
present
the
various
provisions
of
business
law
in
a
‘Teach
Yourself’
style;
disproving
the
myth
that
business
law
is
a
complex
and
unexciting
subject.
The
present
edition
of
the
book
has
the
following
distinctive
features:
1. The
contents
have
been
modified
at
appropriate
places
to
make
book
more
lucid
and
user-friendly.
2. Part
V
of
the
book
that
deals
with
the
‘Company
Law’
has
been
thoroughly
revised
and
updated
in
the
light
of
enactment
of
new
company
legislation,
i.e.,
The
Companies
Act,
2013.
3. Each
chapter
begins
with
the
learning
objectives
that
enable
the
focus
areas
of
the
chapter;
this
certainly
improves
readability.
4. In
every
chapter,
sidebars
have
been
inserted
adequately
to
facilitate
the
reader
to
understand
the
concepts
covered
in
the
chapter.
5. Every
chapter
ends
with
‘Chapter
in
Review’
card
which
provides
a
bird’s
eye-view
of
the
subject
matter
of
the
chapter
vis-à-vis
learning
objectives
covered
in
the
chapter
besides
glossary
of
key
terms
discussed
therein.
6. Particularly
for
testing
a
student’s
understanding
of
the
concepts
discussed
in
the
chapter,
there
are
end-of-chapter
exercises
along
with
a
comprehensive
set
of
objective-type
questions,
case-lets,
and
review
questions.
Answers
to
the
objective-type
questions
and
‘hints’
to
the
case-lets
have
been
retained
along
with
the
exercise
set.
7. A
guide
to
case
citations
and
list
of
references
are
provided
at
the
end
of
the
book
so
as
to
enable
the
reader
to
understand
the
cases
cited
in
the
book
and
to
facilitate
further
study
of
legal
cases,
if
one
is
interested.
8. A
new
chapter,
‘Limited
Liability
Partnership’,
has
been
added
to
this
revised
edition
to
add
value
to
the
previous
edition.
9. A
comprehensive
set
of
case
studies
has
been
appended
to
the
book
to
help
the
reader
judge
their
overall
understanding
of
legal
aspects
of
business
they
would
have
gained
by
reading
this
volume.
Preface
to
the
First
Edition
Law
is
an
integral
part
of
business.
Every
major
area
of
business
has
a
legal
dimension—sales
and
advertisement,
price
and
distribution,
production
and
operations,
finance
and
investment,
personnel
and
industrial
relations,
export
and
import,
and
setting
up
and
winding
up
of
a
business.
With
the
increasing
complexities
of
business,
law
is
assuming
added
importance
in
business
management.
For
the
successful
management
of
an
organization,
it
is
important
that
the
managers
have
a
fairly
good
knowledge
of
the
legal
provisions
impinging
upon
the
business.
It
is
not
possible
for
anyone
to
manage
a
business
without
adequate
knowledge
of
business
laws.
This
is
why
curricula
of
business
programmes,
such
as
MBA,
MCom,
BBA/BBS,
BIBF/BFIA,
and
BCom,
include
at
least
one
course
on
business
law
or
legal
aspects/legal
environment
of
business.
About
the
Book
Legal
Aspects
of
Business
is
intended
to
serve
as
a
textbook
for
students
of
business
schools
and
universities
across
India.
The
book
is
primarily
designed
to
meet
the
needs
of
postgraduate
students
of
business
administration.
It
will
also
prove
useful
to
the
students
of
BCom,
BBA/BBS,
BFIA/BIBF,
etc.,
and
to
the
other
readers
who
are
interested
in
understanding
the
nuances
of
business
law.
It
can
also
be
used
by
students
of
law
while
dealing
with
courses
on
business
and
commercial
laws,
company
law,
and
consumer
protection
law.
The
book
is
written
primarily
from
an
Indian
perspective
with
the
aim
to
explain
the
core
legal
aspects
of
business
in
a
systematic,
concise,
and
illustrative
manner.
Landmark
legal
cases
have
been
used
as
examples
to
illustrate
the
technical
aspects
of
the
subject
matter.
An
effort
has
been
made
in
this
book
to
follow
a
fresh
and
novel
approach
to
present
the
basic
principles
of
business
law
in
an
interesting
manner
and
to
belie
the
myth
that
law
is
a
complex
and
dull
subject.
Content
and
Structure
The
book
is
divided
into
six
parts,
which
include
33
chapters.
Part
I
deals
with
the
Indian
Contract
Act,
1872,
a
legislation
that
regulates
various
transactions
of
a
business
undertaking.
It
lays
down
the
general
principles
relating
to
the
formation
and
enforceability
of
contracts;
rules
governing
the
provisions
of
an
agreement
and
offer;
the
various
types
of
contracts
including
those
of
indemnity
and
guarantee,
bailment
and
pledge,
and
agency.
It
also
contains
provisions
pertaining
to
breach
of
contract.
This
part
is
divided
into
the
following
13
chapters:
Chapter
1
provides
introduction
to
the
nature
and
kinds
of
contracts.
After
reading
this
chapter,
the
reader
will
be
able
to
understand
how
a
contract
is
formally
established.
This
chapter
describes
the
essentials
of
a
valid
contract
and
presents
the
classification
of
contracts
on
the
basis
of
formation,
execution,
and
enforceability.
Chapter
2
provides
an
introduction
to
offer
and
acceptance,
two
key
elements
required
to
make
a
contract.
In
this
chapter,
the
legal
rules
are
governing
a
valid
offer
and
valid
acceptance,
including
revocation
thereof
explained.
Chapter
3
deals
with
consideration,
another
basic
requirement
for
establishing
a
contract.
It
spells
out
the
essential
elements
of
valid
consideration
and
throws
light
on
the
legality
of
contracts
without
consideration.
Chapter
4
describes
the
competency
of
parties.
This
chapter
elucidates
the
position
of
agreements
with
a
minor,
with
a
person
of
unsound
mind,
and
with
persons
otherwise
disqualified
by
law,
viz.,
alien
enemies,
convicts,
insolvents,
and
foreign
sovereigns.
Chapter
5
covers
the
free
consent
of
the
parties
to
a
contract.
All
the
five
key
elements—coercion,
undue
influence,
misrepresentation,
fraud,
and
mistake—that
may
impair
a
free
consent,
are
explained
in
the
best
possible
manner.
Chapter
6
discusses
the
legality
of
the
object
behind
a
contract
and
describes
on
the
agreements
opposed
to
public
policy.
Chapter
7
deals
with
void
agreements
and
describes
the
remedies
against
a
void
agreement.
Chapter
8
introduces
contingent
contracts
and
discusses
the
rules
governing
their
enforcement.
The
differences
between
a
contingent
contract
and
a
wagering
contract
are
also
discussed
here.
