Q.1 Distinguish between fraud and misrepresentation. Ans : Meaning of fraud (Secs.

17 and 19) Fraud means and includes any of the following acts committed by a party to a contract with an intent to deceive the other party thereto or to induce him to enter into a contract: (i) the suggestion as a fact of that which is not true by one who does not believe it to be true; (ii) active concealment of a fact by one having knowledge or belief of the fact; (iii) promise made without any intention of performing it; ( iv) any other act fitted to deceive; (v) any such act or omission as the law specifically declares to be fraudulent. Meaning of misrepresentation (Secs.18-19) Misrepresentation is also known as simple misrepresentation whereas fraud is known as fraudulent misrepresentation. Like fraud, misrepresentation is an incorrect or false statement but the falsity or inaccuracy is not due to any desire to deceive or defraud the other party. Such a statement is made innocently. The party making it believes it to be true. In this way, fraud is different from misrepresentation. Difference between Fraud and Misrepresentation:The main difference in fraud and misrepresentation are, 1) In misrepresentation the person making the false statement believes it to be true. In fraud the false statement is person who knows that it is false or he does not care to know whether it is true or false. 2) There is no intention to deceive the other party when there is misrepresentation of fact. The very purpose of the fraud is to deceive the other party to the contract. 3) Misrepresentation renders the contract voidable at the option of the party whose consent was obtained by misrepresentation. In the case of fraud the contract is voidable It also gives rise to an independent action in tort for damages. 4) Misrepresentation is not an offence under Indian penal code and hence not punishable. Fraud, in certain cases is a punishable offence under Indian penal

code. 5) Generally, silence is not fraud except where there is a duty to speak or the relations between parties is fiduciary. Under no circumstances can silence be considered as misrepresentation. 6) The party complaining of misrepresentation can t avoid the contract if he had the means to discover the truth with ordinary deligance. But in the case of fraud, the party making a false statement cannot say that the other party had the means to discover the truth with ordinary deligance.

Q.2 What are the remedies for breach of contract. Ans : Remedies for Breach of Contract When someone breaches a contract, the other party is no longer obligated to keep its end of the bargain. From there, that party may proceed in several ways: (i) the other party may urge the breaching party to reconsider the breach; (ii) if it is a contract with a merchant, t he other party may get help from consumers associations; (iii) the other party may bring the breaching party to an agency for alternative dispute resolution; (iv) the other party may sue for damages; or (v) the other party may sue for other remedies. Rescission of the contract: When a breach of contract is committed by one party, the other party may treat the contract as rescinded. In such a case the aggrieved party is freed from all his obligations under the contract. Damages (Sec.75): Another relief or remedy available to the promisee in the event of a breach of promise by the promisor is to claim damages or loss arising to him therefrom. Damages under Sec.75 are awarded according to certain rules as laid down in Secs.73-74. Sec.73 contains three important rules:

(i) Compensation as general damages will be awarded only for those losses that directly and naturally result from the breach of the contract. (ii) Compensation for losses indirectly caused by breach may be paid as special damages if the party in breach had knowledge that such losses would also follow from such act of breach. (iii) The aggrieved party is required to take reasonable steps to keep his losses to the minimum. The most common remedy for breach of contracts: The usual remedy for breach of contracts is suit for damages. The main kinds of damages awarded in a contract suit are ordinary damages. This is the amount of money it would take to put the aggrieved party in as good a position as if there had not been a breach of contract. The idea is to compensate the aggrieved party for the loss he has suffered as a result of the breach of the contract. In addition to the rights of a seller against goods provided in Secs.47 to 54, the seller has the following remedies against the buyer personally. (i) suit for price (Sec.55); (ii) damages for non-acceptance of goods (Sec.56); (iii) suit for interest (Sec.56). Suit for price (Sec.55) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay the price, the seller can sue the buyer for the price of the goods. Where the property in goods has not passed to the buyer, as a rule, the seller cannot file a suit for the price; his only remedy is to claim damages. Suit for damages for non-acceptance (Sec.56) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance. Where the property in the goods has not passed to the buyer and the price was not payable without passing of property, the seller can only sue for damages and not for the price. The amount of damages is to be

determined in accordance with the provisions laid down in Sec.73 of the Indian Contract Act, 1872. Thus, where there is an available market for the goods prima facie, the difference between the market price and the contract price can be recovered. Suit for interest (Sec.61) When under a contract of sale, the seller tenders the goods to the buyer and the buyer wrongfully refuses or neglects to accept and pay the price, the seller has a further right to claim interest on the amount of the price. In the absence of a contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of the price. The interest may be calculated from the date of the tender of the goods or from the date on which the price was payable. It is obvious that the unpaid seller can claim interest only when he can recover the price, i.e., if the seller s remedy is to claim damages only, then he cannot claim interest. Buyer s remedies against seller The buyer has the following rights against the seller for breach of contract: (i) damages for non-delivery (Sec.57); (ii) right of recovery of the price; (iii) specific performance (Sec.58); (iv) suit for br each of condition; (v) suit for breach of warranty (Sec.59); (vi) anticipatory breach (Sec.60); (vii) recovery of interest (Sec.61).)

Q.3 Distinguish between indemnity and guarantee. Ans: Indemnity:Sec. 124, and 125, for a contract of indemnity. Sec. 124 provides that a contract of indemnity is a contract whereby one party promises to save the other from loss caused to him (the promisee) by the conduct of the promisor himself or by the conduct of any other person. A contract of insurance is a glaring example of such type of contracts. A contract of indemnity may arise either by (i) an express promise or (ii) operation of law, e.g. the duty of a principal to indemnify an agent from consequences of all lawful

acts done by him as an agent. The contract of indemnity, like any other contract, must have all the essentials of a valid contract. These are two parties in a contraction of indemnifier and indemnified. The indemnifier promises to make good the loss of the indemnified (i.e. the promisee). Guarantee:In law and common usage: A promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another person, who is, in the first instance, liable to such payment or performance, an engagement which secure or insures another against a contingency, a warranty, a security. Same as guaranty. Difference between indemnity and guarantee:There are distinguishing differences between Indemnity and Guarantee in the Indian Contract Act. Section 124 of the Indian Contract Act, 1872 defines the "Contract of Indemnity". It is a contract by which one party promises to save the other from loss caused to him by the contract of the promissory himself, or by the conduct of any other person. 'A' contracts to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of 20000 rupees. This is a contract of indemnity. A contract of guarantee is defined in Section 126 of the Act. It is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the surety; the person in respect of whose default the guarantee is given is called the principal debtor and the person to whom the guarantee is given is called the creditor. In contract of indemnity there are only two parties viz the indemnifier or provisory and the indemnity holder or promise. In contract of guarantee there are three parties viz the creditor, principal debtor and surety. In indemnity, there is primary and independent liability. In guarantee the surety has collateral liability.

There is no existing debt generally in the case of contract of indemnity where there is existing debt in the case of guarantee. There are two contracts in a contract of indemnity where there are three contracts in the case of guarantee. In Indemnity the promissory is discharged by payment. In guarantee the surety is discharged by payment made by principal debtor. Indemnifier may have some interest in the transaction where the surety will not have any connection with the transaction.

Q.4 What is the distinction between cheque and bill of exchange. Ans: Bill of exchange A bill of exchange is defined by Sec.5 as an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the order of, a certain person, or to the bearer of the instrument . Cheques A cheque is the usual method of withdrawing money from a current account with a banker. Savings bank accounts are also permitted to be operated by cheques provided certain minimum balance is maintained. A cheque, in essence, is an order by the customer of the bank directing his banker to pay on demand, the specified amount, to or to the order of the person named therein or to the bearer. Sec.6 defines a cheque. The Amendment Act 2002 has substituted new section for Sec.6. It provides that a cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic from. Cheque Bill of Exchange It is drawn on a banker It may be drawn on any party or

individual. It has three parties - the drawer, the drawee, and payee. There are three parties - the drawer, the drawee, and the payee. It is seldom drawn in sets Foreign bills are drawn in sets It does not require acceptance by the drawee. It must be accepted by the drawee before he can be made liable to pay the bill Days of grace are not allowed to a banker Three days of grace are always allowed to the drawee. No stamp duty is payable on checks Stamp duty has to be paid on bill of exchange. It is usually drawn on the printed It may be drawn in any pape r and need not necessarily be printed.

Q.5 Distinguish between companies limited by shares and companies limited by guarantee. Ans : A company limited by guarantee is normally incorporated for non-profit making functions. The company has no share capital. A company limited by guarantee has members rather than shareholders. The members of the company guarantee/undertake to contribute a predetermined sum to the liabilities of the company which becomes due in

the event of the company being wound up. The Memorandum normally includes a nonprofit distribution clause and these companies are usually formed by clubs, professional, trade or research associations. The main difference between a company limited by guarantee and a company limited by shares is that the company has no share capital. A Company limited by guarantee is a lesser known type of business entity which is generally formed by non-profit purposes and has members instead of shareholders. There are both some similarities and differences between the two groups. Members and shareholders enjoy limited liability, however in cases where a share based company is liquidated; the latter might be required to pay all amounts of unpaid monies relating to the shares they hold. For example, if an individual shareholder holds 100 shares of Rs.100 each, all of which remains unpaid at the time of dissolution, then they would be required to pay Rs.10000 to the company. Most companies limited by guarantee have a constitution which states that each member is only required to pay Rs.100 should it be dissolved. Assuming that an average shareholder holds more than one share in a company, members in a business limited by guarantee do appear to have less risk attached to their positions.

Q.6 what is the definition of cy ber crime. Ans: Computer crime, or cyber crime, refers to any crime that involves a computer and a network. The computer may have been used in the commission of a crime, or it may be the target. Net crime refers, more precisely, to criminal exploitation of the Internet. Issues surrounding this type of crime have become high-profile, particularly those surrounding hacking, copyright infringement, child pornography, and child grooming. There are also problems of privacy when confidential information is lost or intercepted,

lawfully or otherwise. Cyber crime includes anything from downloading illegal music files to stealing millions of dollars from online bank accounts. Cyber crime also includes non-monetary offences, such as creating and distributing viruses on other computers or posting confidential business information on the Internet. Perhaps the most prominent form of cyber crime is identity theft, in which criminals use the Internet to steal personal information from other users. Two of the most common ways this is done is through phishing and pharming. Both of these methods lure users to fake websites, where they are asked to enter personal information. This includes login information, such as usernames and passwords, phone numbers, addresses, credit card numbers, bank account numbers, and other information criminals can use to "steal" another person's identity. For this reason, it is smart to always check the URL or Web address of a site to make sure it is legitimate before entering your personal informati on. CYBERCRIME Cybercrime is defined as crimes committed on the internet using the computer as either a tool or a targeted victim. It is very difficult to classify crimes in general into distinct groups as many crimes evolve on a daily basis. Even in the real world, crimes like rape, murder or theft need not necessarily be separate. However, all cybercrimes involve both the computer and the person behind it as victims, it just depends on which of the two is the main target. Hence, the computer will be looked at as either a target or tool for simplicity s sake. For example, hacking involves attacking the computer s information and other resources. It is important to take note that overlapping occurs in many cases and it is impossible to have a perfect classification system. Computer as a tool When the individual is the main target of Cybercrime, the computer can be considered as the tool rather than the target. These crimes generally involve less technical expertise as the damage done manifests itself in the real world. Human weaknesses are generally

exploited. The damage dealt is largely psychological and intangible, making legal action against the variants more difficult. These are the crimes which have existed for centuries in the offline. Scams, theft, and the likes have existed even before the development in high-tech equipment. The same criminal has simply been given a tool which increases his potential pool of victims and makes him all the harder to trace and apprehend. Computer as a target These crimes are committed by a selected group of criminals. Unlike crimes using he computer as a tool, these crimes requires the technical knowledge of the perpetrators. These crimes are relatively new, having been in existence for only as long as computers have - which explains how unprepared society and the world in general is towards combating these crimes. There are numerous crimes of this nature committed daily on the internet. But it is worth knowing that Africans and indeed Nigerians are yet to develop their technical knowledge to accommodate and perpetrate this kind of crime. Cyber crime encompasses any criminal act dealing with computers and networks (called hacking). Additionally, cyber crime also includes traditional crimes conducted through the Internet. For example; hate crimes, telemarketing and Internet fraud, identity theft, and credit card account thefts are considered to be cyber crimes when the illegal activities are committed through the use of a computer and the Internet. crime committed using a computer and the internet to steal a person's identity or sell contraband or stalk victims or disrupt operations with malevolent programs Cyber crime It refers to all the activities done with criminal intent in cyberspace or using the medium of Inte rnet. These could be either the criminal activities in the conventional sense or activities, newly evolved with the growth of the new medium. Any activity, which basically offends human sensibilities, can be included in the ambit of Cyber crimes. Because of the anonymous nature of Internet, it is possible to engage in a variety of criminal activities with impunity, and people with intelligence, have been grossly misusing this aspect of the Internet to commit criminal activities in cyberspace. The field of cyber crime is just emerging and new forms of criminal activities in cyberspace are coming to the forefront each day. For example, child pornography on Internet

constitutes one serious cyber crime. Similarly, online pedophiles, using Internet to induce min or children into sex, are as much cyber crimes as any others. Categories of cyber crimes: Cyber crimes can be basically divided in to three major categories: 1. Cyber crimes against persons; 2. Cyber crimes against property; and 3. Cyber crimes against government. 1. Cyber crimes against persons: Cyber crimes committed against persons include various crimes like transmission of child-pornography, harassment of any one with the use of a computer and cyber stalking. The trafficking, distribution, posting, and dissemination of obscene material including pornography, indecent exposure, and child pornography constitute the most important cyber crimes known today. These threaten to undermine the growth of the younger generation and also leave irreparable scars on the minds of the younger generation, if not controlled. Similarly, cyber harassment is a distinct cyber crime. Various kinds of harassments can and do occur in cyberspace, or through the use of cyberspace. Harassment can be sexual, racial, religious, or of any other nature. Cyber harassment as a crime also brings us to another related area of violation of privacy of citizens. Violation of privacy of online citizens is a cyber crime of a grave nature. Cyber stalking: The Internet is a wonderful place to work, play and study. The net is merely a mirror of the real world, and that means it also contains electronic versions of real life problems. Stalking and harassment are problems that many persons especially women, are familiar within real life. These problem s also occur on the Internet, in the form of cyber stalking or online harassment . 2. Cyber crimes against property: The second category of Cyber crimes is Cyber crimes against all forms of property. These crimes include unauthorized computer trespassing through cyberspace, computer vandalism, and transmission of harmful programs and unauthorized possession of computerized information. 3. Cyber crimes against Government: The third category of Cyber crimes is Cyber crimes against Government. Cyber Terrorism is one distinct kind of crime in this category. The growth of Internet has shown that individuals and groups to threaten international governments as also to terrorize the citizens of a

country are using the medium of cyberspace. This crime manifests itself into Cyber Terrorism when an individual cracks into a government or military maintained website, for the purpose of perpetuating terror. Since Cyber crime is a newly emerging field, a great deal of development has to take place in terms of putting into place the relevant legal mechanism for controlling and preventing cyber crime. The courts in United States of America have already begun taking cognizance of various kinds of fraud and cyber crimes being perpetrated in cyberspace. However, much work has to be done in this field. Just as the human mind is ingenious enough to devise new ways for perpetrating crime, similarly, human ingenuity needs to be canalized into developing effective legal and regulatory mechanisms to control and prevent cyber crimes. A criminal mind can assume very powerful manifestations if it is used on a network, given the reachability and size of the network. Legal recognition granted to Electronic Records and Digital Signatures would certainly boost E Commerce

in the country. It will help in conclusion of contracts and creation of rights and obligations through electronic medium. In order to guard against the misuse and fraudulent activities over the electronic medium, punitive measures are provided in the Act. The Act has recognized certain offences, which are punishable. They are: Tampering with computer source documents (Sec 65) Any person, who knowingly or intentionally conceals, destroys or alters or intentionally or knowingly causes another person to conceal, destroy or alter any i. Computer source code when the computer source code is required to be kept by law for the time being in force, ii. Computer programme, iii. Computer system and iv. Computer network. - Is punishable with imprisonment up to three years, or with fine, which may extend up to two lakh rupees, or with both. Hacking with computer system (Sec 66): Hacking with computer system is a punishable offence under the Act. It means any person intentionally or knowingly causes wrongful loss or damage to the public or destroys or deletes or alters any information

residing in the computer resources or diminishes its value or utility or affects it injuriously by any means, commits hacking. Such offenses will be punished with three years imprisonment or with fine o f two lakh rupees or with both. Publishing of information which is obscene in electronic form (Sec 67): Whoever publishes or transmits or causes to be published in the electronic form, any material which is lascivious or appeals to prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely, having regard to all relevant circumstances, to read, see or hear the matter contained or embodied in it shall be punished on first conviction with imprisonment for a term extending up to 5 years and with fine which may extend to one lakh rupees. In case of second and subsequent conviction imprisonment may extend to ten years and also with fine which may extend up to two lakh rupees. Failure to comply with orders of the controller by a Certifying Authority or any employee of such authority (Sec 68):