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Business Law

Dr.Padma Srinivasan

Module 1
Indian Contract Act 1872

Introduction to Business Laws- 266 sec (except J
Overview of Law of Contract
Classification of Contract
Legal Elements of Contracts
Proposal & Acceptance
Terms to Know

To think.
1. Kamla wants to give/gift her daughter a
well bred horse on her birthday
2. Sashi wants a particular car. When he
contacts the owner, he is willing to sell
only a cow.
3.Keshu wants to buy a new house for
Rs.25 lakhs. But the builder is willing to
sell at Rs.35 lakhs?
4.Ram wants to make hand granades at
home. Can he?

A contract is an agreement
between 2 or more persons (individuals, businesses,
organizations or government agencies)
to do, or to refrain from doing, a particular thing in
exchange for something of value.
Contracts generally can be written, using formal or
informal terms, or entirely verbal.
The terms of the contract - the who, what, where,
when, and how of the agreement - define the binding
promises of each party to the contract.
Agreement= offer+ acceptance
Contract= Agreement+ Enforceability

As per Contract Act, an agreement enforceable
by law is a contract. [Sec2(h)]
An offer is the first step in forming a contract.
The middle step is the other party's acceptance of
the deal.
The last step is performance where each party
live up to their side of the bargain/promise.

Offer + Acceptance=Performance of contract

Sample Lease Agreement
LEASE AGREEMENT, entered into between _____________(Landlord) and
___________________ (Tenant).

For good consideration, it is agreed between the parties as follows:
1. Landlord hereby leases and lets to Tenant the premises described as
2. This lease shall be for a term of 10 year(s), commencing on 4
November 2013.
3. Tenant shall pay Landlord the annual rent of Rs 60000 during said
term, in monthly payments of Rs5000, each payable monthly on the
first day of each month in advance. Tenant shall pay a security deposit
of Rs 50000, to be returned upon termination of this Lease and the
payment of all rents due and performance of all other obligations.
4. Tenant shall at its own expense provide the following utilities or
services: ______________
Landlord shall at its expense provide the following utilities or
services: __________________
5. Tenant further agrees that:
a) Upon the expiration of the Lease it shall return possession of
the leased premises in its present condition, reasonable wear and
tear, fire casualty excepted. Tenant shall commit no waste to the
leased premises.

b) Tenant shall not assign or sublet said premises or allow any
other person to occupy the leased premises without Landlord's
prior written consent.

c) Tenant shall not make any material or structural alterations to
the leased premises without Landlord's prior written consent.

d) Tenant shall comply with all building, zoning and health codes
and other applicable laws for the use of said premises.

e) Tenant shall not conduct on premises any activity deemed extra
hazardous, or a nuisance, or requiring an increase in fire insurance

f) Tenant shall not allow pets on the premises.
g) In the event of any breach of the payment of rent or any
other allowed charge, or other breach of this Lease, Landlord
shall have full rights to terminate this Lease in accordance with
state law and re-enter and re-claim possession of the leased
premises, in addition to such other remedies available to
Landlord arising from said breach.
6. This lease shall be binding upon and inure to the benefit of
the parties, their successors, assigns and personal
7. This Lease shall be subordinate to all present or future
mortgages against the property.

8. Additional Lease terms:

Signed this ________ day of _____________, 20___.

_______ Landlord ______ Tenant

Activity 1
Any agreements/ contracts you have
What points have you noted?
What for?
Rent agreement -----
Receipt from shop -----
Guarantee card -----
Bank application -----
Share certificate -----
Appointment order -----

Are these contracts?
Bus ticket
Key of a house
Aadhar card
Bank pass book
Ration card
Discount coupon
Membership card
Migration Card of university

Steps for entering a Valid Contract
1. Ensure that there is an offer
2. Confirm that the offer has been accepted
3. Work out the details
4. Put it in writing
5. Print & Sign