Course Manual

LAWS FOR
MANAGERS

PGDM/PGDRM/PGDIB/PGDFS [2010-12]

Laws for Managers

 PGDM/PGDRM/PGDIB/PGDFS Batch [year]

I. COURSE FACILITATOR (Dr. Harpreet Kaur, cabin no.115, email: harpreet.kaur@iilmgsm.ac.in,

phone: 0120-3374315)
II. COURSE OVERVIEW:
This course “Laws for Managers” is designed to familiarize the students with laws applicable to conduct of
business with the intent to enable them to analyze and apply the law accurately in their decision making process
during conduct of business. Simultaneously, the emphasis will be on effective, logical and precise
communication for expressing their views on current legal issues of business. Care has been taken to
incorporate entire regulatory framework applicable to business and also certain topics relevant from the point of
view of budding managers.
III. COURSE TOPICS (Broad):

1. Business Contracts
2. Business Organizations
3. Business Transactions
4. Financing of Business Transactions
5. Protection of consumers
6. Introduction of FEMA/RTI/IPRs/ADRs
7. Protection against Sexual Harassment

III. LEARNING OUTCOMES:

The objective of the course is to help you to:

1. Understand relevance of laws applicable to business

2. Understand Business transactions
3. Understand that at the foundation of every business transaction a contract exists
4. Know fundamentals of business contracts
5. Familiarize different types of organizations available for conduct of business
6. Know how Business transactions are financed?
7. Understand remedies and protections available to a consumer of goods and services
8. Get insight into protection of intellectual properties
9. Understand your right to information as citizen of India
10. Understand business dispute resolution mechanisms available as alternative to court
11. proceedings

V. PRE- REQUISITES:

Knowledge of business practices.

VI. BOOKS AND REFERENCES:

Main Text Book

Singh, Dr. Avtar, Mercantile Law , Eastern Book Company, Lucknow (2006)

Additional Readings

1. Pathak, Akhileshwar, Legal Aspects of Business, Tata Mc Grawhill, 2009

2. Singh, Avtar, Company Law, Eastern Book Co.., Lucknow (2007).
3. ICSI, Company Law,I New Delhi.
4. The Institute of Chartered Accountants of India, ICAI, New Delhi
5. Website- icai.org
6. Vashishth, Vikas, Law and Practice of Intellectual Property in India , Bharat Law House, New Delhi (2006).
7. Dobson, P. & Schmittoff, Charlesworth’s Business Laws , Sweet & Maxwell, London (1991).
8. Lal, Ratan and Lal, Dhiraj, Law of Torts , Wadhwa & Co., Nagpur (1995).
9. Kuchhal, M.C., Business Law, Vikas Publishing House,Noida (2005).
10. Agarwal, V.K., Consumer Protection Act, Bharat Law House, New Delhi (2007).
11. ICSI, General and Commercial Laws, New Delhi.

Journals/Magazine:
1. Chartered Secretary, The Journal of Corporate Professionals
2. Lawyers' Update, Magazine by Universal Book Traders

Online Resources:

1. www.icai.org
2. www.icsi.edu

VII. ASSESSMENT CRITERIA:

S.No Parameter Weightage

1 Class Test etc 20%

2 Group Assignments / Case submissions 20%

3 End Term (2-hour examination) 60%

VIII. SESSION PLAN

S No. Topic Pre-reading/ Awareness Chapter/Activity

expected
1 Overview of Business Laws General understanding
of business, trade &
commerce
2-8 Law of Contract Part I- Avtar Singh Chapter 1-11
9 Contracts- Guest Lecture Practical aspects of
contracts
10-11 Sale of Goods Basic understanding as Part III-Avtar Singh
buyer of goods
12-13 Negotiable Instruments Basic understanding Part IV-Avtar Singh
about currency notes &
procedure of making
payments
14 Class Test
15 Partnership Act Basic understanding Part II-Avtar Singh
16-19 Company Law Basic understanding of Part IV-Avtar Singh
company
20-21 Public Sector Undertakings-Guest Lecture
22 Limited Liability Partnerships Bare Act
23 Introduction to Consumer Protection & Competitions General understanding Part III-Avtar Singh
as a consumer of goods
and services
24 Introduction to Intellectual Property Rights Study material P.S.Narayana
25 Introduction to Right to Information Act and Foreign Study material Bare Acts
 Exchange Management Act
26-27 Introduction to Alternative Dispute Resolution & Study material Arbitration, Avtar Singh
discussion on overall learning

IX. SESSION DETAILS

Session 1: In this session the students will be introduced to different laws bracketed under the term 'Business laws'.
They will be able to understand the applicability and importance of Laws applicable to business.
a..Pre-Reading : not required
b. Question for discussion in class: What is the necessity of laws for business?
c. Learning Outcomes: As an introductory session, the objective is help the students understand laws applicable to
business. As a budding manager why they should understand these laws? At the end of the session, the student must
also be able to appreciate the importance of business laws.

Session 2: In this session the students will be introduced to the concepts of agreements, contracts, proposal and its
communication, intention to have legal relations and standard form contracts.
a. Pre-Reading : Chapter 1, Part I, Mercantile Law
b. Question for discussion in class: Difference between contract and agreement, proposal/offer and general offers
c. Case discussion : Upton Rural District Council v. Powell; Lalman v. Gauri Datta; Carlill v. Carbolic Smoke Ball Co.
d. Learning Outcomes: Students would understand agreement and contract; how contracts exist at the foundation of
every business transaction and whether there was any intention to create legal relations; How proposal is communicated
to give rise to promises leading to binding obligations; They will be able to understand how in their daily life they make
standard form contracts.

Session 3: In this session the students will be informed about acceptance of offer, lapse of offer, difference between
contracts and tenders, first condition of enforceability i.e. consideration in a contract
a. Pre-Reading : Chapter 2, Part I, Mercantile Law
b. Question for discussion in class: Difference between contract and tenders; Why do we make contracts?
c. Case discussion : Durga Prasad v. Baldeo; Kedar Nath v. Gauri Mohd.
d. Learning Outcomes: Student will be able to understand acceptance of offer converting an offer into a promise; how
and when offer lapses; What is the advantage a person gains from an agreement which makes it enforceable by law;
what is difference between contracts and tenders.

Session 4: In this session the students will be told about two other conditions of enforceability i.e. capacity to contract
and free consent.
a. Pre-Reading : Chapter 3,4, Part I, Mercantile Law
b. Question for discussion in class: Who are competent to contract? What factors vitiate consent?
c. Case discussion : Mohiribibee v. Dharmodas Ghose; Leslie v. Sheill
d. Learning Outcomes: Student will be able to identify persons who are competent to contract in order to have
enforceability in courts. They would be also be in a position to understand what do we mean by free consent, why it is
necessary and what are the factors that vitiate free consent.

Session 5: Students will be informed about the last condition of enforceability i.e. lawful object.
a. Pre-Reading : Chapter 5, Part I, Mercantile Law
b. Question for discussion in class: What are void and unlawful agreements?
c. Case discussion : Madhub Chander v. Raj Coomar; Carlill v. Carbolic Smoke Ball Co
d. Learning Outcomes: Students will be able to understand legality of contracts; why do contracts become void;
distinction between void and unlawful agreements.

Session 6: In this session the students will understand when and how the contracts come to an end i.e. discharge of
contracts bringing an end to obligations of parties.
a. Pre-Reading : Chapter 6, Part I, Mercantile Law
b. Question for discussion in class: How the contract is discharged? What are the circumstances that make
performance of the contract impossible?
c. Case discussion : Krell v. Henry; Hadley v. Baxendale
d. Learning Outcomes: Students will be able to understand four ways for discharge of contracts; how the parties
become free from obligations; circumstances under which the performance becomes impossible to perform; breach of
contract; damages payable by the party liable for reach of contract.

Session 7: In this session the students will understand specific contracts of indemnity and guarantee.
a. Pre-Reading : Chapter 7, 8, Part I, Mercantile Law
b. Question for discussion in class: What are the economic functions of indemnity and guarantee?
c. Case discussion : Adamson v. Jarvis; illustrations given in the Contract Act, 1872
d. Learning Outcomes: Students will be able to understand importance of indemnity bond, indemnity insurance,
economic functions of guarantee, features of guarantee, parties involved, liability of surety.

Session 8: In this session the students will come to know specific contracts of bailment and pledge.
a. Pre-Reading : Chapter 9, 10, Part I, Mercantile Law
b. Question for discussion in class: What is the relevance of bailment and pledge?
c. Case discussion : Illustrations given in the Contract Act, 1872
d. Learning Outcomes: Students will be able to understand importance of bailment and pledge in business transactions
as such type of contracts are involved in almost all the business transactions.

Session 9: Students will come to know about specific contract of agency in this session.
a. Pre-Reading : Chapter 11, Part I, Mercantile Law
b. Question for discussion in class: What is the relevance of contracts of agency and how they are formed?
c. Case discussion : Illustrations given in the Contract Act, 1872
d. Learning Outcomes: Students know that producers and manufacturers are able to supply their goods to consumers
through contracts of agency. They will understand importance of agency, how agents can be appointed, how relations
between principal and agent regulated, what are the rights and obligations of agents and how agency relations come to
an end.

Session 10: In this session the students will be informed about contracts of sale, formation of contract, subject -matter
of the contract, difference between contract of sale and contract of work and material, sale by persons who are not
owners of goods.
a. Pre-Reading : Chapter 13, Part III, Mercantile Law
b. Question for discussion in class: What is the subject matter of the contract of sale? What is the difference between
contract of sale and agreement to sell?
c. Case discussion : Case-lets given in the Mercantile Law
d. Learning Outcomes: Students would be in a position to understand peculiarities of contracts of sale; they would be
able to make out a difference between sale and agreement to sell; they would be able to understand the rights of persons
purchasing goods from persons who are not the owners of the goods like, finder of goods etc. They would be able to
understand whether a contract is a sale or contract of work and material.

Session 11: In this session the students will be informed about conditions and warranties applicable to contracts of sale,
performance of contract, instalment deliveries, rights and duties of seller and buyer.
a. Pre-Reading : Chapter 13, Part III, Mercantile Law
b. Question for discussion in class: How the contract of sale is performed? What are the rights and duties of sellers
and buyers?
c. Case discussion : Niblett v. Confectioners' Materials Co; Grant v. Australian Knitting Mills
d. Learning Outcomes: Students would be in a position to understand conditions applicable to contracts of sale and
consequences of breach of such conditions; when and how the property in goods gets transferred to the buyer; rights of
seller transferred to the buyer; rights of unpaid seller as well as general rights and duties of the sellers and buyers.

Session 12: The negotiable instruments like promissory notes, bills of exchange and cheques will be discussed in the
session.
a. Pre-Reading : Chapter 17, Part IV, Mercantile Law
b. Question for discussion in class: What are negotiable instruments and what is their relevance in business? What is
negotiation of instruments?
c. Case discussion : Illustrations given in the Contract Act, 1872
d. Learning Outcomes: Students would be in a position to understand how payments related to business transactions
are made; different types of negotiable instruments; difference between currency notes and negotiable instruments; why
instead of cash negotiable instruments are issued for making payments;

Session 13: In this session concepts of crossing of cheques, dishonour of cheques, liabilities and protection of bankers
will be discussed
a. Pre-Reading : Chapter 17 Part IV , Mercantile Law
b. Question for discussion in class: What are negotiable instruments and what is their relevance in business? What is
negotiation of instruments?
c. Case discussion : Illustrations given in the Contract Act, 1872
d. Learning Outcomes: Students would get a general understanding of crossed instruments and bearer instruments and
their mode of payments; liabilities of bankers; liabilities of persons issuing cheques without having sufficient balance in
the account,

Session 14: Class Test

Session 15: Formation of partnerships, partnership deed, rights and duties of partnerships, dissolution of partnerships
a. Pre-Reading : Chapter 12, Part II, Mercantile Law
b. Question for discussion in class: Different types of business organizations available for conduct of business by
association/group of persons, difference between partnerships and company form of organizations
c. Case discussion : Abdul v. Century Wood Industries; Cox v. Hickman
d. Learning Outcomes: Students would be exposed to different types of business organizations; they will understand
how a partnership is formed; whether registration of partnership firm is necessary or not; what are the consequences of
non-registration; what are the mutual rights and duties of partners; how a firm can be dissolved.

Session 16: Session will include the topics of nature of company and registration of companies
a. Pre-Reading : Chapter 15, Part V, Mercantile Law
b. Question for discussion in class: What is corporate personality? What are the advantages and disadvantages of
incorporation?
c. Case discussion : Salomon v. Salomon & Co Ltd
d. Learning Outcomes: Students will be able to understand nature of corporate personality; why the company form of
organization is preferred for conduct of business by a group of persons; formalities for registration of companies;
liability on pre-incorporation contracts.

Session 17: Session will include the topics related to documents of incorporation ie. Memorandum and articles of
association, prospectus and promoters.
a. Pre-Reading : Chapter 15, Part V, Mercantile Law
b. Question for discussion in class: What is prospectus and why it is necessary to issue prospectus for public
companies?
c. Case discussion : Latest prospectus issued by any public company
d. Learning Outcomes: Students will come to understand role played by promoters in incorporation of a company;
how a public company can raise public finances; necessity of issuing prospectus; importance of contents of prospectus.

Session 18: Session will include topics relating to shares, types of shares, transfer and transmissions of shares.
a. Pre-Reading : Chapter 15, Part V, Mercantile Law
b. Question for discussion in class: How many types of shares can be issued by a company? What is share capital of a
company?
c. Case discussion : latest examples
d. Learning Outcomes: Students would be able to form an understanding about types of shares; share transfers through
depositories in public companies; restrictions in share transfers in private companies; forfeiture of shares and surrender
of shares.

Session 19: Session will include topics relating to share capital, types of companies and meetings of companies
a. Pre-Reading : Chapter 15, Part V, Mercantile Law
b. Question for discussion in class: Different types of companies, resolutions of shareholders
c. Case discussion : latest examples
d. Learning Outcomes: Students would be able to understand existence of different types of companies; alteration of
share capital; difference between purchase of shares by a company and buy-back of shares by a company.

Sessions 20-21: Guest Lectures

Session 22: In this session, students will be briefed about Limited Liability Partnerships.
a. Pre-Reading : Study material
b. Question for discussion in class: Necessity of introducing Limited Liability Partnerships in India
c. Learning Outcomes: Students would be able to understand constitution, incorporation of LLPs, difference between
unlimited liability partnerships, company and LLPs.

Session 23: Session will introduce topics of consumer protection and competitions to students
a. Pre-Reading : Part III, Mercantile Law
b. Question for discussion in class: Relevance and purposes of consumer protection and competition law
c. Case discussion : case-lets given the book
d. Learning Outcomes: Students would be in a position to distinguish between protections provided by Sale of Goods
Act and Consumer Protection Act and appreciate the necessity of enacting separate law for consumer protection and
competitions.

Session 24: Session will introduce intellectual property rights to students

a. Pre-Reading : Study material
b. Question for discussion in class: Protection of Commerce
c. Case discussion : latest examples
d. Learning Outcomes: Students would be exposed to concepts relating to trademarks, patents, and copyrights. They
would understand how to obtain trademarks etc, how these intellectual property rights are infringed and what are the
remedies available for protection of IPRs.

Session 25: Introduction of provisions of Right to Information Act and Foreign Exchange Management Act to
students
a. Pre-Reading : Study material
b. Question for discussion: Benefits of Right to Information and FEMA
c. Case discussion : latest examples
d. Learning Outcomes: Students will know citizens' right to information from Government and Government controlled
organisations. They will also understand financing of international business transactions.

Session 26: Session will introduce provisions of Law of Torts and Indian Penal Code relating to sexual harassment at
workplace.
a. Pre-Reading : Study material
b. Question for discussion: Sexual harassment of female employees
c. Case discussion : latest examples
d. Learning Outcomes: Students will understand tortious liablity for sexual harassment and liability under IPC for
sexual harassment, if offence is made out.

Session 27: Session will include topics relating to alternative dispute resolution mechanisms
a. Pre-Reading : Study material
b. Question for discussion in class: Dispute resolution mechanisms available
c. Case discussion : latest examples
d. Learning Outcomes: Students would be able to understand purposes of ADRs and will be able to differentiate
between different mechanisms available for resolution of business dispute .