PROJECT REPORT

ON
_____________________________________________________

BACHELOR OF COMMERCE (FINANCIAL MANAGEMENT) SEMESTER V

(2016-2017)

SUBMITTED
IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE
AWARD OF DEGREE OF
B.Com (FINANCIAL MANAGEMENT)

BY

__________________________
ROLL NO. -______________

BIRLA COLLEGE OF ARTS, SCIENCE &COMMERCE

MURBAD ROAD KALYAN (W)

 BIRLACOLLEGE OF ARTS, SCIENCE, & COMMERCE, KALYAN

(Conducted by Kalyan Citizens Education Society)
(Affiliated by University of Mumbai)

BACHELOR OF COMMERCE (FINANCIAL MANAGEMENT)

CERTIFICATE
This is to certify that __________________________ OF T.Y B.COM
(FINANCIAL MANAGEMENT) Semester V has successfully completed the
project on
_______________________________________________________________
______________________________________________________, under the
guidance of _____________________________________

PROJECT SUPERVISOR:

COURSE CO-ORDINATOR:

INTERNAL EXAMINER

EXTERNAL EXAMINER

PRINCIPAL

2
 DECLARATION

I, ________________________________ student of T.Y B.COM (FINANCIAL

MANAGEMENT) semester V (2016-2017) hereby declare that I have completed the project

on________________________________________________________________________

____________. I further declare that the information imparted is true and fair to the best of

my knowledge.

SIGNATURE

Name: _______________

ROLL NO. _________________

3
ACKNOWLEDGEMENT

4
 Project synopsis

BACKGROUND OF THE STUDY

SIGNIFICANCE OF THE STUDY

RESEARCH PROBLEMS

OBJECTIVE OF THE STUDY

SAMPLING MEHTOD

5
 ANALYSIS OF DATA

KEY FINDINGS

SUGGESTIONS

CONCLUSION

6
7
Contents
1 Chapter 1: Introduction ( 8-10 Pages)................................................................................1

1.1 Introduction: Meaning and definition..........................................................................1

1.2 Features/Characteristics...............................................................................................1

1.3 Origin and growth........................................................................................................1

1.4 Advantages/Disadvantages/Benefits/Limitations........................................................1

1.5 Recent trends and growing importance.......................................................................1

1.6 Key challenges.............................................................................................................1

1.7 Statement of research problems...................................................................................1

1.8 Objective of the study..................................................................................................1

1.9 Chapterisation scheme.................................................................................................1

2 Chapter 2: Review of literature (3-5 Pages).......................................................................1

2.1 Factor 1:.......................................................................................................................1

2.2 Factor 2:.......................................................................................................................1

2.3 Factor 3:.......................................................................................................................1

3 Chapter 3: Research methodology (3-5 pages)..................................................................2

3.1 Research design...........................................................................................................2

3.2 Sampling design..........................................................................................................2

3.2.1 Target population..................................................................................................2

3.2.2 Sampling frame....................................................................................................2

8
 3.2.3 Period of study.....................................................................................................2

3.3 Sample size..................................................................................................................2

3.4 Data collection.............................................................................................................3

3.5 Structure of questionnaire............................................................................................3

3.6 Format of questionnaire designed...............................................................................3

3.7 Analytical Tools applied for the study.........................................................................5

3.8 Testing of Hypothesis procedure................................................................................6

3.8 Research ethics............................................................................................................7

4 Chapter 4: Data analysis (26- 36 pages)............................................................................7

4.1 ANOVA.......................................................................................................................7

4.2 Correlation...................................................................................................................7

4.3 Average score..............................................................................................................7

4.4 Percentage analysis......................................................................................................7

5 Chapter 5: Summary of findings (2-4 Pages).....................................................................7

6 Chapter 6: Suggestions and conclusion (2-3 Pages)..........................................................7

List of figures

List of Tables

9
1 Chapter 1: Introduction ( 8-10 Pages)

Section 2(h) of the Indian Contract Act, 1872 defines a contract as an agreement enforceable by
law. Section 2(e) defines agreement as every promise and every set of promises forming consideration
for each other. Section 2(b) defines promise in these words: When the person to whom the proposal
is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted,
becomes a promise.
From the above definition of promise, it is obvious that an agreement is an accepted proposal.
The two elements of an agreement are:

(i) offer or a proposal; and

(ii) an acceptance of that offer or proposal.

What agreements are contracts? All agreements are not studied under the Indian Contract Act, as
some of them are not contracts. Only those agreements which are enforceable at law are contracts. The
Contract Act is the law of those agreements which create obligations, and in case of a breach of a
promise by one party to the agreement, the other has a legal remedy. Thus, a contract consists of two
elements:
form
(i) an agreement; and ing
the
(ii) legal obligation, i.e., it should be enforceable at law. cons
idera
However, there are some agreements which are not enforceable in a law court. Such agreements tion
do not give rise to contractual obligations and are not contracts. for
each
Examples other
, is
A invites B for dinner in a restaurant. B accepts the invitation. On the appointed day, an
B goes to the restaurant. To his utter surprise A is not there. Or A is therebut refuses agre
to entertain B. B has no remedy against A. In case A is present in the restaurant but B eme
fails to tur nt.
Som
e
agre
1.1 ABOUT THE TOPIC eme
nts
An Agreement enforceable by law is a contract. Therefore in a contract there must be cann
(1) an agreement and (2) the agreement must be enforceable by law. An agreement ot be
comes into existence whenever one or more persons promise to one or others, to do or enfo
not to do something, Every promise and every set of promises, rced

10
thought he courts of law, e.g., an agreement to play cards or go to a cinema. An com
agreement, which can be enforced through the courts of law, is called contract. The
plexi
law of contract deals with agreements which can be enforced through courts of law.
The law of contract is the most important part of commercial law because every ty in
80
commercial transaction starts from an agreement between two or more persons. the
According to Salmond a contract is an agreement creating and defining obligations
natu
between the parties. According to Sir William Anson, A contract is an agreement
enforceable at law made between two or more persons, by which rights are acquired re of
by one or more to acts or forbearances on the part of the other or others. Sir William the
Anson observes as follows: As the law relating to property had its origin in the econ
attempt to ensure that what a man has lawfully acquired he shall retain, so the law of omic
contract is intended to ensure that what a man has been led to expect shall come to
pass; and that what has been promised to him shall be performed. The Indian
Contract Act of 1872 (Act IX of

1872) lays down certain general rules regarding contracts. The Act is not exhaustive.
There are other Acts relating to particular types of contracts e.g. the Negotiable
81
Instruments Act, Transfer of Property Act, etc. The Contract Act does not affect nay
usage or custom of trade, or any incident of any contract not inconsistent with the
82
provisions of the Act.

1.2 BACKGROUND OF STUDY

The history of the act brings to light the very origin of the economic processes
and in this regard, contract is important in order to conduct ones business in
62
everyday life . The prevalent system in the ancient times was barter, exchange and it
was based on the mutual principle of give and take. This was confined to
commodities as there was no medium of exchange as is seen in the form of money
today and this system can be traced back in time to the Indus Valley Civilization
(the earliest human civilization). The system still finds relevance in the contemporary
world, where it can be found in commercially and economically underdeveloped
areas. However, the relevancy of such a system in modern times is questioned as the

11
 there
to.
The
y
will
also
be
able
to
purp
systems as well as the increasing demand and supply systems due to the osef
change in the wants and needs of the human beings came to the fore. Also, money had ully
evolved as the medium of exchange such that the value of every commodity could deal
now be quantified. Thus, in such an era of greater economic transaction one finds the with
existence of Contract Laws and with it, their relevance. the
disp
The Indian Contract Act codifies the way we enter into a contract, execute a
utes
63
contract and implement provisions of a contract and effects of breach of a contract . arisi
The contractual capacity is restricted in certain situations otherwise it is the ng
64 out
prerogative of the individual to contract. There are specific areas which deal with
of
property, movable goods and specific performance such as the Transfer of Property
such
Act, the Sale of Goods Act and the Specific Relief Act. Some of these acts, were
cont
originally a part of the Indian Contract Act enacted in 1872 but were later codified as
ractu
separate laws. Moreover the Act is not retrospective in nature. Hence a contract
al
entered into prior to 1st September 1872, even though to be performed after passing arra
65
of this Act is not hit by this Act. Hence, we arrive of the conclusion that the basic nge
framework of contracting is covered in the Indian Contract Act and it is an important ment
area of law, with roots deep in the history of civilization- and thus forms the subject s.
matter of this project of this course of legal.

1.3 NEED FOR STUDY

With the basics of Special Contracts and enable them to grasp the nuances of the
contractual transactions involving these forms of contracts. At the conclusion of this
course students will be able to analyze the implications of a contractual arrangement
falling under any of the discussed head of special contracts. They will be able to
determine the legality of the transactions and also the rights and duties of the parties

12
 1.6

KE

RE

SE

AR

CH
1.4 SIGNIFICANCE FOR STUDY
PR

OB
1.5 OBJECTIVE OF STUDY
LE
ght after the students have
M
To learn Fundamental principles underlying these special forms

ofcontract. CHAPT

To learn the limits of the freedom of the parties within the ER

prescriptions of law in relation to the special forms of contract and
consequently better appreciate the impact on the classical theory of 2:
freedom of contract.
To appreciate the relationship of general principles with the
Re
special contracts. To develop skills of legal analysis and
vie
argument.
To understand how law allocates for the economic risks involved in w
commercial transactions.
To understand the growing importance of special contracts and to of
have a foundational understanding of the new forms special
contracts including technology transfer agreements, e-contracts lite
including software licensing agreements, infrastructure contracts,
government contracts, public private partnerships etc. rat

ure

13
 2.1 CONCEPTUAL FRAMEWORK H

a
Here different technical and legal terms,which are frequently used in this words have
r
been defined so as to remove any ambiguity and to bring clearity in expression.
d
Contract is an agreement enforceable by law.
w
consideration is when at the desire of the promiser the promise or any other person a

has done or abstained from doing something ,such act or abstinence or promise is r

called an consideration. e

Acceptance eans i

when apera\aacceptance to whom the proposal is made signifies his assent there to c

the proposal is said to acceptance. a

Browser is an applivation program used to explore the internet.Means any electronic
l
magnetic optical or other high speed data processing dvice or system which perform
e
logical,arithmetic,and memory function by manipulation of electronic ,magnetic or
l
optical impulses and includes all input ,output, stroage.
e
Connectivity, the extent to which any computer oa application progrm can co-
c
operatewith other network components either hardware or software purchased from
t
other vendors
Cyber security means protecting information, equipment,devices, computer
r
resources, communication devices and information stored therein from unathourised o
access ,use, disclosure,modification or destruction. n

14
 c component of computer system including peripheral, printed circuit

board,printers,etc

2.1.1 MEANING AND DEFINTION

2 2.1.2 ESSENTIAL ELEMENTS OF A VALID CONTRACT

We have seen above that the two elements of a contract are: (1) an agreement; (2)
legal obligation. Section 10 of the Act provides for some more elements which are
essential in order to constitute a valid contract. It reads as follows:
All agreements are contracts if they are made by free consent of parties,
competent to contract, for a lawful consideration and with a lawful object and are not
hereby expressly declared to be void.

Thus, the essential elements of a valid contract can be summed up as follows

1. A
g
r
e
e
m
e
n
t.

15
 2. Intention to create legal relationship. to the
contr
3. Free and genuine consent. ary.
Simil
4. Parties competent to contract. arly,
in the
5. Lawful consideration. case
of
6. Lawful object.
agree
7. Contracormalities. ments
of
These 8.certainity of meaning purel
y
9.possibility of performance. dome
stic
and
10. necessary legal formalities social
natur
e, the
presu
mptio
n is
1. Agreement
that
they
As already mentioned, to constitute a contract there must be an agreement. An agreement is do
composed of two elementsoffer and acceptance. The party making the offer is known as the offeror, not
the party to whom the offer is made is known as the offeree. Thus, there are essentially to be two give
parties to an agreement. They both must be thinking of the same thing in the same sense. In other rise
words, there must be consensus-ad-idem. to
legal
Thus, where A who owns 2 cars x and y wishes to sell car x for Rs. 30,000. B, an conse
acquaintance of A does not know that A owns car x also. He thinks that A owns only car quenc
y and is offering to sell the same for the stated price. He gives his acceptance to buy the same. There es.
is no contract because the contracting parties have not agreed on the same thing at the same time, A Howe
offering to sell his car x and B agreeing to buy car y. There is no consensus-ad-idem. ver,
this
presu
2. Intention to create legal relationship mptio
n is
rebutt
As already mentioned there should be an intention on the part of the parties to the able
by
agreement to create a legal relationship. An agreement of a purely social or domestic nature is not a
givin
contract.
g
Example

A husband agreed to pay 30 to his wife every month while he was abroad. As he failed to pay
the promised amount, his wife sued him for the recovery of the amount.
Held: She could not recover as it was a social agreement and the parties did not intend to create
any legal relations [Balfour v. Balfour (1919)2 K.B.571].
However, even in the case of agreements of purely social or domestic nature, there may be
intention of the parties to create legal obligations. In that case, the social agreement is intended to have
legal consequences and, therefore, becomes a contract. Whether or not such an agreement is intended
to have legal consequences will be determined with reference to the facts of the case. In commercial
and business agreements the law will presume that the parties entering into agreement intend those
agreements to have legal consequences. However, this presumption may be negatived by express terms

16
 evidence to the contrary, i.e., by showing that the intention of the parties was to create legal
obligations.

3. Free and genuine consent

17
 CONTRACTS
LAW OF
The consent of the parties to the agreement must be free and genuine. The consent of the parties should not
be obtained by misrepresentation, fraud, undue influence, coercion or mistake. If the consent is obtained by any
of these flaws, then the contract is not valid.

18
4. Parties competent to contract

The parties to a contract should be competent to enter into a contract. According to Section 11, every
person is competent to contract if he (i) is of the age of majority, (ii) is of sound mind, and (iii) is not
disqualified from contracting by any law to which he is subject. Thus, there may be a flaw in capacity of
parties to the contract. The flaw in capacity may be due to minority, lunacy, idiocy, drunkenness or status. If
a party to a contract suffers from any of these flaws, the contract is unenforceable except in certain
exceptional circumstances.

5. Lawful consideration

The agreement must be supported by consideration on both sides. Each party to the agreement must
give or promise something and receive something or a promise in return. Consideration is the price for
which the promise of the other is sought. However, this price need not be in terms of money. In case the
promise is not supported by consideration, the promise will be nudum pactum (a bare promise) and is not
enforceable at law.
Moreover, the consideration must be real and lawful.

6. Lawful object

The object of the agreement must be lawful and not one which the law disapproves.

7. Agreements not declared illegal or void

There are certain agreements which have been expressly declared illegal or void by the law. In such
cases, even if the agreement possesses all the elements of a valid agreement, the agreement will not be
enforceable at law.

8. Certainty of meaning

The meaning of the agreement must be certain or capable of being made certain otherwise the
agreement will not be enforceable at law. For instance, A agrees to sell 10 metres of cloth. There is nothing
whatever to show what type of cloth was intended. The agreement is not enforceable for want of certainty
of meaning. If, on the other hand, the special description of the cloth is expressly stated, say Terrycot (80 :
20), the agreement would be enforceable as there is no uncertainly as to its meaning.

However, an agreement to agree is not a concluded contract [Punit Beriwala v. Suva Sanyal AIR 1998
Cal. 44].

9. Possibility of performance

The terms of the agreement should be capable of performance. An agreement to do an act impossible
in itself cannot be enforced. For instance, A agrees with B to discover treasure by magic. The agreement
cannot be enforced.

10. Necessary legal formalities

 A contract may be oral or in writing. If, however, a particular type of contract is required by law to be
in writing, it must comply with the necessary formalities as to writing, registration and attestation, if
necessary. If these legal formalities are not carried out, then the contract is not enforceable at law.

2.1.3 CLASSIFICATION OF CONTRACTS

Contracts may be classified in terms of their (1) validity or enforceability, (2) mode of formation, or
(3) performance.

1. Classification according to validity or enforceability

Contracts may be classified according to their validity as (i) valid, (ii) voidable, (iii)
void contracts or agreements, (iv) illegal, or (v) unenforceable.
A contract to constitute a valid contract must have all the essential elements
discussed earlier. If one or more of these elements is/are missing, the contract is voidable,
void, illegal or unenforceable.

As per Section 2 (i) a voidable contract is one which may be repudiated at the will of
one of the parties, but until it is so repudiated it remains valid and binding. It is affected
by a flaw (e.g., simple misrepresentation, fraud, coercion, undue influence), and the
presence of anyone of these defects enables the party aggrieved to take steps to repudiate
the contract. It shows that the consent of the party who has the discretion to repudiate it
was not free.

Example

A, a man enfeebled by disease or age, is induced by Bs influence over him as his

medical attendant to agree to pay B an unreasonable sum for his professional
services. B employs undue influence. As consent is not free; he can take steps to set
the contract aside.
An agreement which is not enforceable by either of the parties to it is void [Section
2(i)]. Such an agreement is without any legal effect ab initio (from the very beginning).
Under the law, an agreement with a minor is void (Section 11).*
A contract which ceases to be enforceable by law becomes void when it ceases to be
enforceable [Section 2(i)].

Examples

(1) A and B contract to marry each other. Before the lime fixed for the marriage, A
goes mad. The contract becomes void.
 (2) A contracts to take indigo for B to a foreign port. As government afterwards
declares war against the country in which the port is situated. The contract
becomes void when war is declared.

(d) A lease, gift, sale or mortgage of immovable property (The Transfer of Property
Act, 1882).

Some of the contracts and documents evidencing contracts are, in addition to be in

writing, required to be registered also. These are:
1. Documents coming within the purview of Section 17 of the Registration Act,
1908.
2. Transfer of immovable property under the Transfer of Property Act, 1882.
3. Contracts without consideration but made on account of natural love and affection between
parties standing in a near relation to each other (Section 25, The Indian Contract Act, 1872).

4. Memorandum of Association, and Articles of Association of a Company, Mortgages and

Charges (The Companies Act, 1956).

2. Classification according to mode of formation

There are different modes of formation of a contract. The terms of a contract may be
stated in words (written or spoken). This is an express contract. Also the terms of a
contract may be inferred from the conduct of the parties or from the circumstances of the
case. This is an implied contract (Section 9).

Example

If A enters into a bus for going to his destination and takes a seat, the law will imply
a contract from the very nature of the circumstances, and the commuter will be
obliged to pay for the journey.

We have seen that the essence of a valid contract is that it is based on agreement of
the parties. Sometimes, however, obligations are created by law (regardless of agreement)
whereby an obligation is imposed on a party and an action is allowed to be brought by
another party. These obligations are known as quasi-contracts. The Indian Contract Act,
1872 (Chapter V Sections 6872) describes them as certain relations resembling those
created by contract.

Examples

(1) A supplies B, a minor, with necessaries suitable to his condition in life. A is

entitled to be reimbursed from Bs property.
(2) A supplies the wife and children of B, a minor, with necessaries suitable to their
condition in life. A is entitled to be reimbursed from Bs property.
 (3) A, a tradesman, leaves goods at Bs house by mistake. B treats the goods as his
own. B is bound to pay A for them.
In all the above cases, the law implies a contract and a person who has got benefit is
under an obligation to reimburse the other.

3. Classification according to performance

Another method of classifying contracts is in terms of the extent to which they have
been performed. Accordingly, contracts are: (1) executed, and (2) executory or (1)
unilateral, and
(2) bilateral.

An executed contract is one wholly performed. Nothing remains to be done in terms

of the contract.

Example

A contracts to buy a bicycle from B for cash. A pays cash. B delivers the bicycle

An executory contract is one which is wholly unperformed, or in which there

remains something further to be done.

Example

On June 1, A agrees to buy a bicycle from B. The contract is to be performed on

June 15.

The executory contract becomes an executed one when completely performed. For
instance, in the above example, if both A and B perform their obligations on June 15, the
contract becomes executed. However, if in terms of the contract performance of promise
by one party is to precede performance by another party then the contract is still
executory, though it has been performed by one party.

Example

On June 1, A agrees to buy a bicycle from B. B has to deliver the bicycle on June 15
and A has to pay price on July 1. B delivers the bicycle on June 15. The contract is
executory as something remains to be done in terms of the contract.
A Unilateral Contract is one wherein at the time the contract is concluded there is an
obligation to perform on the part of one party only.

Example
 A makes payment for bus fare for his journey from Bombay to Pune. He has
performed his promise. It is now for the transport company to perform the promise.
A Bilateral Contract is one wherein there is an obligation on the part of both to do or
to refrain from doing a particular thing. In this sense, Bilateral contracts are similar to
executory contracts.

An important corollary can be deduced from the distinction between Executed and
Executory Contracts and between Unilateral and Bilateral contracts. It is that a contract is
a contract from the time it is made and not from the time its performance is due. The
performance of the contract can be made at the time when the contract is made or it can
be postponed also. See examples above under Executory Contract.

2.1.3 OFFER AND LEGAL RULES REGARDING OFFER

S.2(a) offer

when one person signifies to another his willingness to do or to abstain from

doing any thing with aview to obtaining the assent of that other to such act or

abstinence ,he is said to make a proposal

The person making the offer is called offeror or promiser or proposer. The

offeror may be one or more than one. It may expressely or impliedly.

LEGAL RULES REGARDING OFFER:
1.Intention to create legal relation: While making an offer an offeror must do with

the intention of creating legal relation .offeror must be conscious that the contract will

aise of the offery acceot the same.

2.CERTAIN OR UNAMBIGUOUS: The term of the offer tobe valid must be

certain clear and unambiguous

3.DIFFERENT FROM INVITATION TO OFFER: An offer must be clear there must

be no confusion from an invitation to receive offer. Offer can also come from buyer.

Shopkeeper catlog of prices, display of goods with price tag, self service system, menu

card, are only invitation to offer.

4. COMMUNICATION: An offer must be communicated to the person to whom it is

made. An offer is complete only when it is communicated to the offeree. One can accept

the offer only when he knows about it, doing the act without knowing the offer would not

amounted to acceptance of offer.

5. MERE DECLARATION OF INTENTION: Offer must not only be distinguished

from invitation to offer but also distinguished from mere invitation. It is done with the

intention of getting the acceptance from the offeree.

2.1.4 FACTORS UNDERMINE A CONTRACT

There are five vitiating factors that undermine a contract:

1.Misrepresentation

2.Mistake

3.Duress

4.Undue influence

6.Illegality

A contract can be dfined as a promise or set of promise which the law will enforce.

1.MISREPRESENTATION: A misrepresentation is a false statement of fact or law

which include the other party to enter in to the agreement. Genereally speaking such

statements have to be made before the contract is entered in to. Thus the requirement of

an action for misrepresentation are that it must ourport to be statement of fact or law, it

must have induced the other party to enter the contract and it must have been a false

statement.

2.MISTAKE: Mistake can be split in those mistakes which nullify the agreement and

those which negate the agreement. At common law, a common mistake will nullify the
agreement where the mistake is to the existence of the subject matter, a party buys

property which he already owns or if there has been a mistake as to the quality which

renders the contract impossible to perform or if it is rendered radically different.

Unilateral mistake where one party is aware of the others mistake will render a contract

void, if the releates to the terms of the contract.

3. DURESS: The parties must enter in to a contract willingly if it is to be enforceable

however there are situation where this may be in question. This is the case where duress

or undue influence may have been exerted over one of the contracting parties. Duress was

originally based on threats of physically viloence however the modern doctrine requires

that the victim be subjected to pressure amounting to compulsion of the will and that the

pressure was illegitimate, taking in to account the nature and of the threat.

4. UNDUE INFLUENCE: equity recognises that contracts may be set aside for undue

influence.

Undue influence may be actual or presumed.

If undue influence is to be presumed there must be releationship which give rise to bthe

presumption and something about the transaction which requires an explanation. Undue

influence will be presumed irrebuttably where certain releationship exist. Examples

include solicitor/client, doctor/patient, and parent/child.

5.ILLEGALITY: public policy dictates that illegal contracts are unenforceable and the

court should be vigilant not to enforce any contract with an illegal purpose.

Thus contracts such as those tending to corruption in public life , promoting sexual

immorality, prejudicial to the administration of justice, trading with an enemy in war

time, for future seperation, in restraint of marriage, marriage brokerages and contracts

attempting to oust the jurisdiction of the courts will all be illegal and unenforceable.
2.1.5 SOURCES OF CONTRACT LAW

1.COMMON LAW

2.RESTATEMENT

3.UNIFORM COMMERCIAL CODE (UCC)

4.UNITED NATIONS CONVENTIONS ON CONTRACT FOR INTERNATIONAL

5.UNIDROIT PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS

6.UNIFORM COMPUTER TRANSACTION ACT(UCITA)

7.UNIFORM ELECTRONIC TRANSACTION ACT (UETA)

8.ELECTRONIC SIGNATURE

The explanation are given below:

1.common law: in most jurisdiction contract law is not codified, and thus the primary

source og general contract law is case law.

2. RESTATEMENT: written by american law institue to provide guidance to the bench

and bar, the restatement of contract has no legal but neverthless provided highly

persuasive authority.

3.UNIFORM COMMERCIAL CODE: created under the auspices of the american law

instituteand the national conference of commission on uniform state laws has been

adopted by every state except louisiana

4.UNITED NATIONS CONVENTION ON CONTRACTS FOR INTERNATIONAL

SALE OF GOODS: ratified many of the leading trading nation including the united

states and china, it governs many transactions for sale of goods between parties with

places of business in different nations

5.UNIDRIOT PRINCIPAL OF INTERNATIONAL COMMERCIAL CONTRACT: non

binding authoritative text similar to the restatement

6.UNIFORM COMPUTER TRANSACTION ACT: addresses issues arising out of

computer licensing but has only been enacted in virginia and maryland.

7. UNIFORM ELECTRONIC TRANSACTION ACT: adopted by most states, this act

does not affect basic contract doctrine but governs the use of electronic communication

2.1.6 IMPORTANCE OF VALID CONTRACTS.

Our society depends upon free exchange in market place at every stage. The interactions

in the market all the times depend upon voluntary agreements between individuals or

other legal persons. Such voluntary agreements can never become binding wihout legal

contract.

The origin of contract law can be traced from development of common law ans it is also

alleged to be an offspring of tort law, as both contracts and torts give rise to obligation.

The difference between them lies in fact that the obligations are imposed by law; on the

other hand contracts are medium through which people willingly create commitment

between themselves

There are three key elements for conception of contract. These are offer, acceptance,

consideration and an intention to create legal releationship. Contracts can be written, oral

or implied also.

There are many important points that have to be kept in mind while forming valid

contract; once the agreement is formed , the following clause should be present in same.

1.There should be consideration offered for agreement.

2. The parties should competant to contract.

3. The consent to agreement should be free.

4. The object of the agreement should be lawful.

 2.1.7 CAPACITY TO CONTRACT

(i) Definition:-

It is one of the important essential requirements for a valid contract. Capacity is

defined as:

According to section 10, an agreement becomes a contract if it is entered into

between the parties who arc competent to contract.

Every person is competent to contract who is or the age of majority according to the law

to which he is subject, and who is of sound mind, and is not disqualified from contracting

by any law to which he is subject.

From this definition that any and every person is not capable of entering into a
contract. It follows from the definition enunciated in Section 11, that a person is
incapable of entering into a contract under the following circumstances:

(i) Minor: Is a person who has not attained the age of majority according to the law to
which he is subject;

(ii) Insane: If he is of unsound mind, that is, if he is a lunatic or an idiot or suffering

from a similar disability; and

(iii) Disqualified: If he is disqualified from contracting by any law to

which he is subject.

Minors:- Who is a Minor: Every person domiciled in India (whatever his personal law
may be) is deemed to have attained his majority when he has completed his age of 18
years and not before. To this rule there are two exceptions:

i. When a guardian of the minor of whose person or property is appointed by a

Court of Law and

ii. when a minor's property is taken over by the Court of Wards for management. In
either of these cases, minority continues upto the completion of 21st year.

ii) The Law Regarding Agreements

 The law regarding agreements made by minors under the Indian Law may

be

summarized as follows:

1. Minor's agreement is void ab initial: Today an agreement with or by a minor is

void and inoperative ab initio. Formerly the position was not clear. The Indian
Contract Act docs not expressly slate whether a contract made by a minor is void
or voidable. S.11 of the Act simply states that a minor is not competent to
contract. Following the English Law, it was held formerly that a minor's contract
was voidable but not void. The issue again came up in the case of Mohori Bibi v.
Dharmadas Ghose.
2. A minor can be a promisee or beneficiary: Incapacity of a minor to enter into a
contract means incapacity to bind himself by a contract. There is nothing which
deprives a minor from becoming a beneficiary. Thus; an agreement under which a
minor in whose favour a mortgage has been executed can get a decree for the

enforcement of the agreement. So also a promissory note executed in favour of the minor

can be enforced. He can draw, negotiate or endorse a negotiable instrument so as not to

incur any liability upon him.

iii) Restitution or Compensation:

A minor cannot, in a suit to avoid a contract which is void, be compelled to

compensate for or refund any benefit which he has received under such contract. Sections
64 and 65 of this Act do not apply to such cases. But equity requires a minor who seeks to
avoid a contract which he induces the opposite party to enter with him by fraudulent
representation as to his age, to return the consideration which he received in it. This rule
of equity has been embodied in Section 30 of the Specific Relief Act of 1963 which
provides:

"On adjudging the rescission of a contract, the Court may require the party to
whom such relief is granted to restore, so far as may be, any benefit which he
 may have received from the other party and to make any compensation to him
which justice may require."

1.No specific performance: There can be no specific performance of the agreement

entered into by a minor as they arc void ab initio. A contract entered into by a minor
though void is not unlawful. If a person after attaining majority pays a debt incurred
during his minority, he cannot subsequently bring a suit for the refund of this amount.

2.Minor as a Partner: A minor cannot become a partner in his own right since he is
incapable of contracting under Section 11 of the Contract Act. A partnership pre-supposes
a contract. Therefore, a minor admittedly cannot become a partner. But he can be
admitted into the benefits of a partnership in an existing firm with the consent of all the
existing partners (Section 30) of the Partnership Act).
3. Persons of Unsound Mind

Insane Persons

Definition

One of the essential requisites of competency of parties to a contract is that they

should be of sound mind.)

A person is said to be of sound mind for the purpose of making a contract if, at the time

when he makes it, is capable of understanding It and of forming a' rational judgment as to

its effect upon interest.

Unsoundness of mind may arise from (1) idiocy, (2) lunacy or insanity, (3)
drunkenness and similar other factors. Let us Lake one by one.

(1) Idiocy:-

Idiocy is an extreme form of mental unsoundness of mind. Idiocy is permanent and

incurable. An idiot or a natural fool is a person that has had no understanding from his

infancy.

(2) Lunatics:-
A lunatic is such a person who is mentally deranged due to some mental strain or other

personal experience. A lunatic or non compos mentis is one who has had understanding

but, by disease, grief or other causes has lost the use of his reasons.

3.DRUNKNESS:-

drunkenness must be (i) in a state of complete intoxication so that it can be said that he

had not the reasoning mind about Him to give availed consent to the contract enters into;

and (ii) the other party to the contract must have known of his mental conditions.

4.Contract in Lucid Interval:-

The second paragraph of the section provides that a person, who is usually of
unsound mind, but occasionally of sound mind-lucid interval, may make a contract when
he is of sound mind. Thus, even a patient in a lunatic asylum may contract during lucid
intervals.

2.1.8 LIMITATIONS

Mistake operates to avoid agreement subject to following limitation:

Mistake of Both Parties:-

Under Sec.20 an agreement is void by reason of mistake, when both the parties
are mistaken as to a matter of fact essential to the agreement. This is further
supplemented by Sec.22 that a contract is not voidable merely because it was caused by
one of the parties to it being under a mistake as to matter of fact. There is no real consent
where mistake prevents the parties from coming to an agreement upon the same thing in
the same sense.

The mistake of both the parties of which Sec.20 speaks may be either common or
mutual. Common mistake will definitely render. The agreement void if the parties are
mistaken about the existence of the subject matter.
Erroneous Opinion:-
 The explanation of Sec.20 provides that, "an erroneous opinion as to the value, which

forms the subject matter of the agreement is not to be deemed a mistake as to a

matter of fact.

Mistake of fact not of law:-

Mistake should be of fact and not of law, for, Sec. 21 declares that 'a contract is
not voidable because it is caused by a mistake as to any law in force in India. This section
carries an illustration. Other legal Formalities Part II of section 10 provides:

Nothing herein contained shall affect nay law in force in India, and not hereby
expressly repealed, by which any contract is required to be made in writing or in the
presence of witnesses, or any law relating to the registration of documents.

A contract may be in writing, or made orally. Both carry the same legal effect. But
in some specified cases, the particular law may require a contract to be writing. While in
still other cases, the document may further be required to be stamped and registered. The
effect of such provisions in those laws is an agreement which is otherwise enforceable as
contract as per Section 10 will create rights and liabilities only when they fulfill the
additional requirements stipulated therein, viz., stamp, registration, etc.

A and B make a contract grounded on erroneous belief that a particular to debt is

barred by the Indian law of Limitation, the contract is not voidable

2.1.9 DAMAGES.

There are several different types of damages.

1. Compensatory damages.

2. Liquidated damages.

3. Nominal damages.

4. Punitive Damages.

The following explanation is given below

1. Compensatory damage: These are given to party which was detrimented by the breach

of contract. With compensatory damages, there are two heads of loss, consequential

damage and direct damage.

2. Liquidated damage: These are an estimate of loss agreed to in contract, so that the court

avoids calculating compensatory damage and the parties have greater certainty.

Liquidated damage clauses may be called penalty clause in ordinary language, but the

law distinguish between liquidated damage and penalties.

3. Nominal damages: it consist of small cash amount where the court concludes that the

defendant is in breach of contract but the plaintiff has suffered no quantifiable pecuniary

loss, and may be sought to obtain a legal record of who was at fault

4. Punitive damage: it is used to punish the party at fault; but even though such damages

are not intended primarily to compensate, nevertheless the claimant receives the award.

Punitive damages are not recognized nor permitted in some jurisdiction. In the uk,

punitive damage are not available for breach of contract, but are possible after fraud

.
2.1.1

2.1.2

2.1.3

2.1.4

2.2 RESEARCH FINDINGS

2.3

2.4
3 Chapter 3: Research methodology

This Chapter concentrates on the research methodology. The research design, sampling

design, data collection method, tools applied for the study geographical coverage and

Research Ethics are detailed.

3.1 Research design

The research design is defined by Fouche (2002) as the plan or blue print of the study. This

research is Qualitative research which allows the researcher to gather information and do an

in-depth exploration of issues, and therefore follows a less structured format with fewer

respondents than quantitative methods.

3.2 Sampling design

3.2.1 Target population

3.2.2 Sampling frame

Simple random sampling method was adopted by researcher.

3.2.3 Period of study

The period of study was from _________________________________ The study is mainly

based on primary data collected by _________________________. The secondary data were

collected from various sources throughout the period of this study.

3.3 Sample size

___ samples were collected from

3.4 Data collection

This section discusses the techniques of gathering primary data for the testing of the research

propositions that were crafted in Chapter I and II. The choice of the data instruments depends

on the availability of facilities, time, costs, the degree of accuracy required, the expertise of

the researcher, and other resources associated with the gathering of the data. The

questionnaire is mailed electronically and delivered by hand delivery to the respondent by

researcher or family members or friends and was collected later as per respondents preference

as to giving filling the preprinted form or giving the pre filled questionnaire print form.

3.5 Structure of questionnaire

The structured questionnaire was divided into different sections as felt suitable. The first

section covers personal variables, which are independent based on the assumption that there

were measurable differences amount the levels with regard to the perception of dependent

variables. The second to study factors section of questionnaire covers the factors of study

with dependent variables viz:

3.6 Format of questionnaire designed

Title: ___________________________________________________
Researcher : ________________________________
Personal details

Respondents Name: _________________________________________

Gender: Male Female

Age Below 20 20-30 30-40 40-50 Above 50

Education Below graduate graduate Post graduate Professional Others

Experience: Below 5 years 05-10 years 10-15 years 15-20 years Above 20 years

Study factor:

Very poor Poor Average good Very good

2

Highly yes Yes Cant say no Highly No

3

Very poor Poor Average good Very good

4

Highly yes Yes Cant say no Highly No

5

Highly Agree Agree Neutral Disagree Highly disagree

7

Highly Agree Agree Neutral Disagree Highly disagree

8

Highly Agree Agree Neutral Disagree Highly disagree

9. Rank in order of your preference

o
o
 o
o

3.7 Analytical Tools applied for the study

Data analysis gives meaning to the data that has been collected. More than ____ respondents

were given questionnaire by mail, or by hand delivery. After verification as to completeness

of collected questionnaire, samples were finalized. The data corresponding to the values in

the Likert Scale were entered for each statement in the questionnaire. It was then checked for

accuracy, through three rounds of visual and hardcopy inspections. The MS Excel data

analysis tool was used for statistical data analysis. The statistical analytical tools applied

include:

The Average score analysis is mainly used in any study is to assess the level of

opinion/awareness/satisfaction of the different category of respondents on the various aspects

relating to the study. First the opinion of the respondents are assessed through a scaling

technique and then based on the consolidated opinion of the respondents, the average score is

calculated.
It is the simple and common method to represent raw streams of data as a percentage for

better understanding of collected data. Percentages are used in making comparison between

two or more variables to find the efficacy of each variable.

3. Research ethics

Research ethics refer to the "appropriate" behavior of the researcher in relation to the norms

of the society. It relates to the three parties involved in this research: the researcher, the

respondents and Research supervisor. Researcher assured Confidentiality to the respondents

and secrecy will be maintained. The researcher, on her/his part maintained objectivity,

presented the true research findings.

4 Chapter 4: Data analysis (26- 36 pages)

4.1 Average score

4.2 Percentage analysis

5 Chapter 5: Summary of findings (2-4 Pages)

6 Chapter 6: Suggestions and conclusion (2-3 Pages)