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LEGAL ISSUES IN SALE OF GOODS AND

SERVICES

Project Report
Submitted in the Partial Fulfilments of the Requirement for
POST GRADUATE DIPLOMA IN MANAGEMENT
Date: 18
th
September, 2013



Mayank Khatri PGP29220
Naina Agrawal PGP29219
Neha Varoliya PGP29221
Raka Sardar PGP29223
Rahul Singh Rana PGP29222

Guide: Prof. D S Sengar
Course: Legal Aspects of Management
Institution: IIM Lucknow
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CONTENTS
I. EXECUTIVE SUMMARY ...................................................................................................................... 3
II. LIST OF CASES .................................................................................................................................... 5
III. INTRODUCTION ................................................................................................................................... 6
DEFINITION ............................................................................................................................................. 7
IV. JUDICIAL ENFORCEMENT ................................................................................................................ 8
IMPLIED CONDITIONS ......................................................................................................................... 8
1. CONDITION AS TO TITLE ........................................................................................................... 8
2. SALE BY DESCRIPTION .............................................................................................................. 9
3. CONDITION AS TO QUALITY OR FITNESS .......................................................................... 11
4. CONDITION AS TO MERCHANTABILITY ............................................................................... 12
5. CONDITION AS TO WHOLESOMENESS .............................................................................. 14
6. CONDITION IMPLIED BY CUSTOM ......................................................................................... 14
7. CONDITIONS FOR SALE BY SAMPLE ................................................................................... 15
EXCLUSION OF IMPLIED CONDITIONS......................................................................................... 16
REMEDY FOR BREACH OF CONDITION ....................................................................................... 17
V. HOW LAW IMPACTS NATIONAL AND INTERNATIONAL BUSINESS ..................................... 18
LAWS RELATED TO DOMESTIC BUSINESS IN INDIA ................................................................ 18
VI. GOVERNING BODIES AND LAWS CREATED BY THEM ........................................................... 23
VII. COMPLIANCE MECHANISM AND ITS EFFECTIVENESS .......................................................... 25
VIII. IMPACTS OF TECHNOLOGY ON LAWS RELATED TO SALE OF GOODS AND SERVICES
ONLINE TRADE ............................................................................................................................... 30
TECHNOLOGICAL ADVANCEMENT AND ONLINE BUSINESS WITHIN THE LAW:
MANAGERS MUST KNOW ........................................................................................................................ 31
1. Information Technology Act, 2000: (The Spam Act, 2003) ............................................... 31
2. Biotechnology Patents ............................................................................................................ 31
3. Information Technology (Amendment) Act, 2008: (The Privacy Act, 1988) .................... 32
4. The Electronic Transactions Act 1999 .................................................................................. 32
IX. RECENT E-COMMERCE HAPPENINGS AND LAW IMPLICATIONS ....................................... 33
X. CONCLUSION AND GROUP LEARNINGS .................................................................................... 36
XI. RELEVANCE ........................................................................................................................................ 37
XII. REFERENCES..................................................................................................................................... 38



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EXECUTIVE SUMMARY

Problem Identification:
The changing scenario in the world of technology is affecting the way buyers and
sellers interact with each other. Every day a new product or service is being
conceptualized by designers/ manufacturers and is put to display for sale to attract
customers and earn huge profits. In this pursuit, it may happen that the said product
develops a defect for any reason which may have been overlooked by the designers/
manufacturers in the hurry to launch the said product. Are Indian laws equipped to
handle this mess?


Major Recommendations:
1) Begin Properly: A product or service manufactured/developed properly and
tested rigorously will rarely result in failure to satisfy buyers
2) Awareness: About consumer laws will lead to better transaction and minimal
hassles in the product after life
3) Legal Aid: Acquire legal counsel in case there is a breach of intended
conditions to help compensate for losses
4) Maintain documents: All documents regarding the purchase of a product or
service
Legal Issues
in the sale of
Goods and
Services
Awareness
Identification
Breach of
Contracts
Compliance
IPR
Electronic
Funds
Counterfeiting
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5) Proper Evaluation: Of the product and service before the purchase will help
not only to select the right fit but also be a reasonable shield against faulty
products
6) Be sure of whom you trust:
I. Anonymity gained from operating via the Internet allows counterfeiters to
more easily dupe consumers into thinking they are buying genuine products.
II. Entering a trademark owners trademark into a search engine does not
guarantee that each website in the search results (whether in the natural
results or the sponsored links) offers only genuine products of the trademark
owner.
III. Counterfeits, like genuine manufacturers achieve higher listings for their
websites. Spatial difference makes it impossible to see and handle the
original product. Fake pictures can mislead you
7) Safeguard products by purchasing Patents: Products must be guarded
against counterfeits by proper patenting. This is particularly relevant to
software where sharing of products or sale of product to third party is not
allowed due to nature of product (It can be easily copied)














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LIST OF CASES

Baldry v. Marshall (1925) 1 KB 260
Rowland v. Divall, 1923 2 K. B. 500
Niblett v. Confectioners Material Co 1921 3 K B 387
Butterworth V. Kingsway Motors, 1954, 1 W. L. R. 1286
Bowes v. Shand, 1877, App. Cas.455
Shepherd v. Kane (1821) 5 b & Ald. 240
Varley v. Whipp, (1900) Q. B. 513
Nicholson & Venn v. Smith Marriot, (1947) 177 L. T. 189
Moore & Co v. Landauver & Co, 1921, 2 K. B. 519
Re Andrew Yule & Co, AIR 1932, Calcutta 879
Priest v. Last (1903) 2 K .B. 148
Jones v. Just, 1868LR 3 QB 197, B & Co
Thornet v. Beers, (1919) 1 KB 486
Grant v. Australian Knitting Mills AIR1936PC34
Morreli v Fitch & Gibbons (1928)2K.B.636
Chapronier v/s Mason, (1905)21 TLR633
Dr.Baretto v. T.R.Price, AIR 1939 Nag 19
Priest v Last (1903)2K.B.148
Mody v/s Gregson, L.R.4E.X.49
E & S. Ruben Ltd v/s Fair Bros, 1949 1K.B.254
Lorymer v/s Smith, (1822) 1 B&C1




















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INTRODUCTION
When anyone buys a good or a service, the responsibility lies with the buyer to check
the suitability of the good, whether it suits his purpose. Anyone else cannot be held for
making the choice, if it turned out to be bad. This is called the doctrine of caveat
emptor. Whenever a sale is stipulated under this warning, all of the risk that the good
might be flawed or inappropriate to her needs is assumed by the buyer. This rule is
not for the purpose of shielding sellers who engage in fraud or bad faith dealing, by
claiming misleading representations about the quality of a particular product. It merely
states that a purchaser must examine, verify and test a product considered for
purchase by themselves.
But, the laws protecting consumers, however, have minimized the importance of this
rule. The Purchaser still has to examine the goods upon buying, there is increased
responsibility on the seller and the doctrine of caveat venditor (Latin for "let the seller
beware") is more important.
Whenever any seller gives condition or warranty for a product; he is bound to fulfil the
condition. If in any scenario, the goods bought dont comply with the given conditions
or warranty, the seller has the liability to pay compensation the buyer. Although the
seller has not provided with express stipulations, the products are supposed to meet
with certain conditions and warranties, according to the law. The failure to fulfil such
conditions, has the same effect as the non-fulfilment of express statements.

Sale of goods Act, 1930

This act distinguishes condition and warranty in a different aspects even though both
the terms represent the assurance made by the seller. The main difference is in the
nature or type of promise made. If the promise is such that it touches the base or
purpose of the contract, then it is called a condition. If, the promise is that it is collateral
and an added function to the main purpose of the contract, then it is called a warranty.
The strictness with which the consequences of the breach are handled depends on
the nature of the promise. We will delve further to cover the topics:
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1. Definition of a condition
2. Presupposition of conditions according to law in a contract
3. Exclusions to an implied condition
4. Remedies after the breach of a condition

DEFINITION

As mentioned in the section 12 (2.) of the sale of goods Act, a condition is a
specification, which is essential for the main purpose of the contract and so, the breach
of the condition then enables a right to how to make the contract as being renounced.
Hence, a condition becomes the main basis of a stated contract, which if breached
results in an impairment to the buyer which cannot be repaired, and he has a right to
dismiss the contract of sale and has the permission to return the goods and obtain the
refund of the price which has been paid for the good. It goes to the main aspect of the
contract.
In Baldry v. Marshall (1925) 1 KB 260, the case consisted of A who referred to B, a
car dealer and referred the requirements that a car was required by him and he wanted
to purchase one for touring purposes and then got a suggestion that a Buggati car will
be fit for the purpose. With full acceptance on the advice, he bought the car. Later, it
was found that the car turned to be not at all useful for the purpose for which it was
needed by the buyer i.e. touring. So, he sued the car dealer and wanted to recover
the amount paid. The Court perceived that the suitability of the car was for touring
purpose and this was a condition as it was important, and that the non-fulfilment
changed the exact purpose of purchasing the car, which it could not fulfil. Hence, it
was held that B had to pay back the price of the car and A can return it.



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JUDICIAL ENFORCEMENT

IMPLIED CONDITIONS

If any express condition is made or not, the law assumes certain standards which need
to be guaranteed by the seller before the sale of any product. These assumptions as
to the nature of the product, its quality, and also its rightful ownership are called implied
conditions. The implied conditions in sale of goods are given in sections 14 to 17.
1. CONDITION AS TO TITLE
In case of sale, it is presumed in law that, the seller has all the right of selling the
goods, and also, in the specific case when there is an agreement to sell, the seller
would have the right to sell the goods when the time of sale arises. In such a case
that, the seller sells goods with not having any right to sell them, then the purchaser
has all the right to renounce the agreement. The term right to sell concludes that the
seller must have a valid title to the Goods. According to section 14 of this Act, In a sale
related to a contract, until the nuances of the contract give a different attention, there
exists an implied condition on behalf of the seller that--
(a) In case of a sale, the right belongs to the seller to sell
(b) If there is an agreement to sell, the seller will possess a right to sell the goods when
the time of sale arrives
In Rowland v. Divall, 1923 2 K. B. 500, the case states that A bought in repurchase, a
used car from B, who is a car dealer. The car was confiscated by the police after few
months as it turned out to be a stolen one. The court concluded that this was a breach
of the condition as to the title since B did not have an original right to sell the car. It
was then held that A could recover the entire price of the good from B.
In Niblett v. Confectioners Material Co 1921 3 K B 387, B sold 3000 tin of condensed
milk to A. Of these 1000 tins were labelled as Nissly Brand.N, but, another
manufacturer of the milk who used the brand name of Nestle, appealed that this was
an violation of their trademark. Subsequently, B had to remove all of the labels which
were already there from the tins and then needed to sell them without the brand name
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and was subjected to a loss. The court said that the seller had violated the condition
of the right to sell which he did not have.
So, whenever anyone sells goods while infringing on the copyright or the trademark of
someone else, he does not possess the right to sell those goods.
A bought car from B without the knowledge that the car could have been stolen. When
A gathered the knowledge of it B had remunerated the actual owner and attained a
legal possession of the car. Now, A cannot dismiss the contract just using the grounds
of breach of the implied condition.
When a seller is having no right of title to sell the goods, obtains a valid title to the
goods, even if it may be after the sale, but as long as it is before the purchaser try to
find to dismiss the contract, then the seller is complying with the implied condition, as
to title.
In Butterworth V. Kingsway Motors, 1954, 1 W. L. R. 1286, this case highlights when,
a seller who did not have any title to the sale of goods at the exact time of the sale,
but, later consequently obtains a title, then, that title feeds the faulty titles of the actual
buyer and also the following buyer.
2. SALE BY DESCRIPTION
If there is a contract to sell a particular thing, i.e. peas, then you cannot please a party
to buy beans instead of what was contracted. This rule is written in section 15, where
there is a defined regarding a contract about the sale of goods by their description,
there exists an implied condition that, the goods will agree to the contacted
explanation.
In Bowes v. Shand, 1877, App. Cas.455, the case highlights that if, the explanation of
the object offered is unlike in any way, it is not the object that the buyer negotiated for,
the other party is not bonded to buy it. Goods are supposed to be sold by description
whenever, they are described in a contract such as farm wheat is described, so can
be a Australian Apple and Indian silk etc. and the purchaser contracts with confidence
on the given description.
In Shepherd v. Kane (1821) 5 b & Ald. 240, there was a contract for a ship which was
to be sold as copper fastened vessel and was to be booked with all errors, without
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any grant for any faults at all, of any kind. But, later on, the ship proved as only partially
Copper fastened. Subsequently, the court said that that according to the implied
condition, the buyer had a right to deny the goods and reject them.
Whenever there is any usage of a descriptive word or expression in a contract of sale
for describing the good, it develops an implied condition that the purchase items will
resemble the given description. Lets take an example of a sale of Seedless fruit,
indicates that the given fruit will have no seeds at all. Then, if it is found that the fruit
contains seeds, then the purchaser is entitled to deny the goods.
The following situations are included in the sale of goods by description:
(1) When the buyer has not had the opportunity to see the goods and is dependent
solely on the description which is provided by the seller.
In Varley v. Whipp, (1900) Q. B. 513, P bought a reaping machine, which he had
brought only on the description given by Q as P have never seen it. The seller
described the good as to be new the year before and was used to cut about 50 to 60
acres only. P then upon receiving the machine found it to be very old. It was then
contented that P could return back the machine as it did not fulfil the given description.
(2) When the buyer has had the opportunity to look at the soon and even seen them,
but still believes on what is told by the seller.
In Nicholson & Venn v. Smith Marriot, (1947) 177 L. T. 189, the case describes an
auction of a set of Napkins and some table clothes. The items were described as being
from the seventh century and the buyer bought the set in the auction after seeing it.
Afterwards, it was found that the set actually did not date back to the seventh century
but belonged to the eighteenth century times, it was then held that he could discard
those goods.
(3) Packaging may be a part of the description of some goods.
In Moore & Co v. Landauver & Co, 1921, 2 K. B. 519, Q bought 300 of Australian
Apples which were packed in cases containing 30 tins from P. P presented a significant
percentage reduction in cases comprising only 24 tins. The case held that Q could
deny all the tins as the packaging of the goods were not according to the description
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of the package as per the stated contract, since the way in which the apples were to
be packed was an important aspect of the description of the good.
Sale as per given description and by sample:
Section 15, states that if the sale is completed by sample and as per the given
description, so then it is not enough that it matches the given description but further
so it should also match the given samples.
3. CONDITION AS TO QUALITY OR FITNESS
Generally there is no such implied condition which says that the goods given by the
seller would be fit according to buyer for a particular purpose. Instead, the rule of
Caveat emptor applies. This states that it is the buyer who is responsible to look that
the goods correspond to the purpose for which they are required by him, and this
needs to be checked by him while buying. But, in the situation given below, the seller
has to assume the responsibility of the fitness of the goods.
1) The buyer makes known to the seller and askes for advice on the good stating
a purpose for which some goods are needed by him
2) The buyer and seller rely completely on the skills and decision of the buyer
3) The sellers main business is the supply of such goods whether or not he is the
manufacturer of the goods or their producer

A. The particular purpose for which the buyer needs goods must be known by the
seller. This stated purpose may be known explicitly or can also be known by
implication, it can be any of these.
In the case that the goods can be utilized for more than one purpose, the buyer has to
then make the particular purpose known to the seller; else the condition about fitness
would not hold.
In Re Andrew Yule & Co, AIR 1932, Calcutta 879, the case talks about a buyer who
ordered for Hessian cloth, which commonly is used for packaging purposes and the
cloth was delivered therefore by the seller. But, in receipt of the cloth, the buyer found
out that the cloth was not suitable for the purpose required by him, which was packing
of food products as it turned out to have an unusual smell. The buyer then desired to
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reject the cloth in accordance with implied condition. However, the court perceived
that the buyer could not reject the cloth as, even though, it was not fit for as per the
particular purpose for which the buyer required, it was fit for the need of packing for
which it was otherwise generally used. Here, there was no breach of condition of
fitness. If the buyer would have communicated to the seller the particular need of the
cloth is for the packing of food products, the situation would have been quite different.
Moreover, its not compulsory that one should express the purpose only in words. If
the goods can be used for just one purpose, it is implicit that the seller would have had
knowledge about the purpose, which ultimately is just one, for which the buyer required
the particular good.
In Priest v. Last (1903) 2 K .B. 148, A reached B, who is a chemist and called for a hot
water bottle. B supplied a bottle to him stating that it was intended to be for hot water,
but not boiling water. A few days later, while using the bottle an injury occurred to As
wife, as the bottle burst, it was then established that the bottle was not fit to be used
as a hot water bottle. The court said that the buyers purpose was clear when he
requested for a bottle that it was supposedly to be a hot water bottle, hence, the
implied condition as to fitness is not come across in this particular case.
B. The buyer has to have relied on the skill and decision of the seller. A requested
B, that he needed a car for touring purpose, as discussed in the above case, B
then provides a car which is not fit for the purpose of touring. Here, a breach of
the condition has occurred.
However, just a mention of a specific trade name by the buyer does not necessarily
mean that he has requested the product of that trade name. He might still be
dependent on the skills and decision of the seller.
C. The seller must be a dealer of the kind of products that are being discharged.

4. CONDITION AS TO MERCHANTABILITY
Section 16 (2)-Where goods are bought by description from a seller who deals in
goods of that description whether he is not the producer or manufacturer or not, there
is an implied condition that the goods shall be of merchantable quality
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The statement above says that the condition of merchantability applies when,
a) The goods are sold by description
b) The seller deals with such goods
Thus when Manohar a shopkeeper sold his old car to Deepak, no implicit situation as
to merchantability applies.
Merchantability of a good refers to the fact that the item should be working properly
for the intended use for which it has been manufactured. For example, when clothes
are sold, merchantability requires that the clothes have their seams and buttons
attached and sewn well enough, that they will not un-seam or come out under regular
use.
In Jones v. Just, 1868LR 3 QB 197, B & Co, a firm of merchants contracted to buy
some bales of Manila hemp from S. The hemp was to arrive from Singapore. On
delivery the hemp was found wetted with sea water and was in such a spoiled state
that it was impossible to sell it in the market. It was held that the Manila hemp was not
of merchantable quality and hence it could be rejected by the buyer.
The condition of merchantability on defects does not apply in conditions where the
seller allows the buyer of the good to examine the good for defects which are not
revealed upon ordinary examination of the product.
The condition of merchantability although applies when the product has some defects
which are not readily observable or on defects which are concealed and which normal
examination of the product does not reveal any defect. This applies even if the buyer
has been able to examine the goods to his satisfaction.
In Thornet v. Beers, (1919) 1 KB 486, B wanted to purchase glue. It was stored in the
sellers warehouse in barrels. B was given every opportunity to open the barrels for
examination but B refrained from inspecting the barrels. It was later discovered that
the glue had defects which B could have easily observed only if he had taken the
opportunity to open the barrels. It was held by the court that no implied condition as to
merchantability had been breached in this case and there was no entitlement to any
relief for B.
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In Grant v. Australian Knitting Mills AIR1936PC34, B purchased underwear from S, B
carefully examined it before purchasing the product. It was revealed that the product
was harmful for his skin later on because of the presence of hidden sulphites in the
underwear, it was not possible to ascertain their presence through normal examination
of the good. It was held as a breach of implied condition of merchantability in this case.
The insight that we can derive from the cases above are that in Thornets case the
buyer was liberty to check the goods for fault but he chose otherwise. Here its not the
seller but it is the buyer of the merchant good who is expected to make the
examination.

Packaging is also of equal importance in considering the merchantability of the good.
In Morreli v Fitch & Gibbons (1928)2K.B.636, M proposed to buy a bottle of Stones
Ginger Wine at Ss shop, which was licensed to sell wines. The bottle broke when M
was drawing the cork, injuring his hand. It was held by the court that the sale was by
description and as the bottle was not of sufficient quality to be called merchantable.
Hence M was eligible to recover damages.

5. CONDITION AS TO WHOLESOMENESS
The condition of fitness or merchantability for food products require that the food
should be wholesome, they should be fit for human consumption.
In Chapronier v/s Mason, (1905)21 TLR633, C bought a bun from a bakers shop. The
bun enclosed a stone which severely damaged Cs teeth. It was held by the court that
the baker was responsible and should pay damages to C, as he had breached the
condition of wholesomeness.
6. CONDITION IMPLIED BY CUSTOM
The acceptable use of a particular good or service limits the implied conditions for the
fitness or quality of the particular good, which is the product is used for the task for
which it was prepared. Only in such a case will the seller be responsible for the product
in case it malfunctions or defects appear in the product or service. Section 16(3), the
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intended use of the purchased goods can be discovered from the conduct of
individuals party to the sale, or from the description mentioned of the thing being
purchased. For example, if a water bottle is bought by a buyer for its intended use then
the buyer does not need to inform the seller the reason for buying the water bottle.
In Dr.Baretto v. T.R.Price, AIR 1939 Nag 19, A purchased false teeth from a dentist
but the set turned out to be unfit for As mouth. The court held that A could reject the
set as the reason why anyone would buy the set was known only to the seller, which
in this case was the dentist.
In Priest v Last (1903)2K.B.148, P purchased a hot water bottle to S, a retail chemist.
The bottle supplied to P burst after a few days use and injured Ps wife. It was held by
the court that since P had made the Chemist aware of the purpose for which he bought
the good, S was liable for breaching the implied condition of the product.

7. CONDITIONS FOR SALE BY SAMPLE
A contract of sale by sample is one in which there is a term which expresses or implies
a sale by sample mentioned in the contract. (Section 17), Case of contract of sale by
sample implies on the following conditions:
1. The sample should be the part of the bulk of the material being sold
2. The buyer should have a fair chance of inspecting and comparing the bulk
material to the sample
3. The product should be free from any defect that renders them non-
merchantable. A reasonable examination should not however make the defect
in the sample obvious.
The condition of merchantability is not breached in case of patent defects.
In Mody v/s Gregson, L.R.4E.X.49, in the sale of brandy transaction, the sample
brandy had been mixed with a dye to provide a particular colour was supplied. It was
held by the court that the defects were not obvious upon a reasonable examination of
the sample. Hence buyer was not bound by the contract even though the bulk goods
were equal to the sample.
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In E & S. Ruben Ltd v/s Fair Bros, 1949 1K.B.254. E proposed to purchase some
rubber material from B. E was given a sample to view the quality of the good. On
receiving the bulk product, E discovered that the quality of the rubber material was
different from the sample. The court held that the bulk did not match up to the sample
provided.
In Lorymer v/s Smith, (1822) 1 B&C1, there was a sale of two parcels of wheat upon
inspection by sample. A week later, when the buyer went to examine the goods one
parcel was shown to him but not the other by the seller, as it was not there. In this
case the court held that the buyer was entitled to reject the contract of sale. It was
ascertained that the buyer was not given a reasonable opportunity to test the bulk
product with the sample properly.

EXCLUSION OF IMPLIED CONDITIONS

Section 62 of the sale of Goods Act states -Where any right, duty or liability would
arise under a contract of sale by implication of law, it may be negative or varied by
express agreement or by the course dealing by the parties or by usage, if the usage
is such as to bind both the parties to the contract
The participating parties are free to make any transaction the fancy in the contract of
sale according to the law. Sellers can exclude their liability by expressly making
provisions in the contract of sale stating that they will not be liable for any condition
not being met. The buyers can similarly waive any breach of condition in a contract.
However, a sellers liability to fulfil the basic aspects of the contract is not excluded by
it. According to Lord Harbinger, If a seller contracts to sell a horse, and expressly
excluded all conditions and warranties, express or implied, could he escape liability, if
he delivered a pig? He would be met by the simple and sufficient answer that he had
failed the one fundamental obligation.
A sold a horse to B with the provision that there is no warranty over the fitness of the
horse. If the horse passes away only a few days after its sale, then in such a case the
seller is not liable to give any compensation to the buyer.
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REMEDY FOR BREACH OF CONDITION

Buyers can avail remedy by rejecting the transaction and returning the goods to the
seller in case there is a breach in condition done by the seller earning a compensation
in return. If a provision of warranty is not fulfilled, the buyer is provided a compensation
to remedy the losses incurred because of the goods which had been bought under the
transaction, but no provision has been provided for the return of goods. When a certain
condition is breached, the buyer is not allowed to end the contract by rejecting the
goods and recover damages from the seller for breach of warranty. Once the buyer
uses his option to treat a breach of condition as a breach of warranty, he cannot insist
on the fulfilment of the condition later. This rule is stated in Section 13 (1) of the Act.
In cases where the contract of sale cannot be revoked and it is proven that the buyer
has accepted the goods or any part of the goods. Any breach of condition by the seller
would be treated only as a breach of a warranty, unless there is a term in the contract,
which expressly implies to the contrary. This rule is laid down in Section 13(2) of the
Sale Goods Act.











18

HOW LAW IMPACTS NATI ONAL AND INTERNATIONAL BUSINESS

A law is a rule of conduct imposed and enforced by the sovereign. Austin
An individual citizen has to adhere to a set of predefined laws to live and sustain in a
society, similarly a business, as an entity must ensure that its practices comply with
the laws defined by the regulating bodies.
Business Law and Managers-Knowledge of relevant aspects of law is necessary for
proper functioning of any business. Managers may face a variety of situations that
would involve legal issues. A broad understanding of business law or legal aspects of
business is key to problem solving for managers. Knowledge of business law enables
them to arrive at correct decisions which is one of the essential functions. Thus, law
being a major factor in decision making, it is necessary that all managers have a
working knowledge of the important business laws and the legal system.
Structure of Indian Law- Indian business law is modelled on the lines of English
mercantile law for being under British rule before its independence for almost two
hundred years.

LAWS RELATED TO DOMESTIC BUSINESS IN INDIA
a. Contract Law: Indian contract law regulates contract law in India. The main
contract law in India is codified in the Indian Contract Act 1872 which came into
effect on September 1, 1872 and is applicable in the whole country. The law
defines contract, execution of contract and the effects of breach of contract.

Terminologies used in the contract law
I. Offer or Proposal-When one person signifies to another his willingness to do or
to abstain from doing anything, with a view to obtaining the assent of that other
person either to such act or abstinence, he is said to make a proposal.
II. Acceptance- When the person to whom the proposal is made, signifies his
assent there to the proposal is said to be accepted.
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III. Promise - A Proposal when accepted becomes a promise. In simple words,
when an offer accepted is a promise.
IV. Promisor and promise - When the proposal is accepted, the person making the
proposal is called as promisor and the person accepting the proposal is called
as promisee.
V. Consideration - When at the desire of the promisor, the promisee or any other
person has done or abstained from doing something or does or abstains from
doing something or promises to do or abstain from doing something, such act
or abstinence or promise is called a consideration for the promise.
Price paid by the one party for the promise of the other Technical word meaning
QUIDPRO-QUO i.e. something in return.
VI. Agreement- Every promise and set of promises forming the consideration for
each other. In short, agreement = offer + acceptance.
VII. Contract- An agreement enforceable by Law is a contract.
VIII. Void agreement- An agreement not enforceable by law is void.
IX. Voidable contract- An agreement is a voidable contract if it is enforceable by
Law at the option of one or more of the parties there to (i.e. the aggrieved party),
and it is not enforceable by Law at the option of the other or others.
X. Void contract - A contract which ceases to be enforceable by Law becomes
void when it ceases to be enforceable.
2. Lawful consideration- consideration must not be unlawful, immoral or opposed to
the public policy.
3. Capacity- The parties in a contract must have capacity or legal ability to make valid
contract. Section 11 of the Indian contract Act specifies that every person is competent
to contract provided he/she
(i) Is of the age of majority according to the law which he is subject
(ii) is of sound mind
(iii) Is not disqualified from contracting by any law to which he is subject.
(iv) Person of unsound mind can enter into a contract during his lucid interval.
(v) An alien enemy, foreign sovereigns and accredited representative of a
foreign state.
20

(vi) Insolvents and convicts are not competent to contract.
4. Free consent - Consent of the parties must be genuine. Consent means agreed
upon the same thing in the same sense i.e. there should be consensus ad idem.
A consent is said to be free when it is not caused by coercion, undue influence, fraud,
misrepresentation or mistake.
5. Lawful object -The object of agreement should be lawful and legal. On the other
hand, two individuals cannot enter into an agreement to do a criminal act.
6. Possibility of performance
The terms of the agreement should be capable of performance.
An agreements to do act, impossible in itself cannot be enforced.
7. The terms of the agreements are either certain or are capable of being made
certain
8. Not declared Void
The agreement should be such that it should be capable or being enforced by law.
Certain agreements have been expressly declared illegal or void by the law.
9. Necessary legal formalities
A contract may be in oral form or in writing.
Where a particular type of contract is required by law to be in writing and
registered, it must comply with necessary formalities as to writing, registration
and attestation.
If legal formalities are not carried out then the contract is not enforceable by
law.
Agreement is a wider term than contract whereas all contracts are agreements.
All agreements are not contracts.
All Contracts are Agreements, but all Agreements are not Contracts
The various agreements may be classified into two categories:
Agreement not enforceable by law Agreement enforceable by law
Any essential of a valid contract is not available.
All essentials of a valid contract are available
21

Conclusion: Thus we see that an agreement may be or may not be enforceable by
law, and so all agreement are not contract. Only those agreements are contracts,
which are enforceable by law, In short, Contracts = Agreement + Enforceability by
Law. Hence, one can conclude All contracts are agreement, but all agreements are
not contracts.
The other most important law in India related to business is
b. The Company Law: In India, the Companies Act, 1956 is the most important
piece of legislation that empowers the Central Government to regulate the
formation, financing, functioning and winding up of companies. The Act covers
the mechanism regarding organizational, financial and managerial and all the
relevant aspects of a company. It empowers the Central Government to inspect
the books of accounts of a company, to direct special audit, to order
investigation into the affairs of a company and to launch prosecution for
violation of the Act. These inspections are designed to find out whether the
companies conduct their affairs in accordance with the provisions of the Act,
whether any unfair practices prejudicial to the public interest are being resorted
to by any company or a group of companies and to examine whether there is
any mismanagement which may adversely affect any interest of the
shareholders, creditors, employees and others. If an inspection discloses a
prima facie case of fraud or cheating, action is initiated under provisions of the
Companies Act or the same is referred to the Central Bureau of Investigation.
The Companies Act is administered by the Central Government through the Ministry
of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators,
Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of
Companies (ROC) controls the task of incorporation of new companies and the
administration of running companies.
The basic objectives underlying the law are:
Creating a minimum standard of good behaviour and business honesty in
company promotion and management.
Due recognition of the legitimate interest of shareholders and creditors and of
the duty of managements not to prejudice to jeopardize those interests.
22

Provision for greater and effective control over and voice in the management
for shareholders.
A fair and true disclosure of the affairs of companies in their annual published
balance sheet and profit and loss accounts.
Adherence to proper standard of accounting and auditing.
Recognition of the rights of shareholders to receive reasonable information and
facilities for exercising an intelligent judgment with reference to the
management.
A ceiling on the share of profits payable to managements as remuneration for
services rendered.
A check on their transactions where there was a possibility of conflict of duty
and interest.
A provision for investigation into the affairs of any company managed in a
manner oppressive to minority of the shareholders or prejudicial to the interest
of the company as a whole.
Enforcement of the performance of their duties by those engaged in the
management of public companies or of private companies which are
subsidiaries of public companies by providing sanctions in the case of breach
and subjecting the latter also to the more restrictive provisions of law
applicable to public companies.
Commencement of business
A private company or a company without share capital can commence its
business immediately after obtaining certificate of incorporation of business.
But a public company having share capital cannot commence any business
until it has obtained the certificate of commencement of business.
International Business: in the era of globalization international business
laws play an important role as the most prominent names in the business
world are transnational corporations. Laws in international business may vary
widely from country to country but there are a few governing bodies who
make the laws and agreements which are accepted universally (almost).

23

GOVERNING BODIES AND LAWS CREATED BY THEM

WTO-In 1995, the World Trade Organization, a formal international organization to
regulate trade, was established. It is considered to be the most important development
in the history of international trade law.
The purposes and structure of WTO organization is governed by the Agreement
Establishing the World Trade Organization, also known as the "Marrakesh
Agreement". It does not specify the actual rules that govern international trade in
specific areas. These are found in separate treaties, annexed to the Marrakesh
Agreement.
Scope of WTO: (a) provide framework for administration and implementation
of agreements; (b) forum for further negotiations; (c) trade policy review
mechanism and (d) promote greater coherence among members economics
policies
Principles of the WTO: (a) principle of non-discrimination i.e. most-favoured-
nation treatment obligation and the national treatment obligation (b) market
access related to reduction of tariff and non-tariff barriers to trade (c) balancing
trade liberalisation and other societal interests (d) harmonisation of national
regulation
Trade in goods: The GATT (General Agreement on Tariffs and Trade) has
been the backbone of international trade law throughout most of the twentieth
century. It contains rules relating to "unfair" trading practices -dumping and
subsidies.
Trade and intellectual property: The World Trade Organisation Trade
Related Intellectual Property Rights (TRIPS) agreement required signatory
nations to raise intellectual property rights (also known as intellectual monopoly
privileges). This arguably has had a negative impact on access to essential
medicines in some nations.
Dispute settlement: Most prominent in the area of dispute settlement in
international trade law is the WTO dispute settlement system. The WTO dispute
settlement body is operational since 1995 and has been very active since then
with 369 cases in the time between 1 January 1995 and 1 December 2007.
24

CISG-The United Nations Convention on Contracts for the International Sale of
Goods (CISG; the Vienna Convention) is a treaty that is a uniform international
sales law. As of 6 March 2013, it had been ratified by 79 countries that account
for a significant proportion of world trade, making it one of the most successful
international uniform laws. Brazil was the most recent state to ratify the
Convention. The CISG was developed by the United Nations Commission on
International Trade Law (UNCITRAL), and was signed in Vienna in 1980.


















25

COMPLIANCE MECHANISM AND ITS EFFECTIVENESS

Repercussions of non-compliance of laws and how compliance acts as an advantage?
Companies usually invest a lot of time in looking for loopholes in a law which is
supposed to govern them and should be followed by various businesses. Many a
times, these loopholes results in considerable profits and benefits to the companies.
Eg. Microsoft identifying loopholes in accounting policies to improvise and customize
their balance sheet so that excess revenue can be adjusted and used for the time
when revenue collection is less, so that their balance sheet always demonstrate a
continuous growth. However, in case no such full-proof loophole is identified, some
firms may choose to break the law if it results in profits. This raises an important
question Should companies obey a law if doing otherwise is more profitable for
them?
The fact of the matter is that when a large company or a corporation is caught breaking
a law, the cost that it incurs is usually quite severe. For the company there is the risk
of being sanctioned, for the employees, the chances of being blamed for misconduct
or some stigma associated to it and for the investors, it could result in dropping of
stock prices. As an example, we have the case of Barclays PLC, which agreed to pay
fines of more than $400 million after the regulators of U.S. and U.K. found it guilty of
trying to generate profits through manipulation of the interest rate used as a global
benchmark for consumers and corporate loans. The employees involved, the
chairman and the Chief executive officers, all have been fired and forced to resign.
Apart from this, the shares have also fallen by more than 10% within a month the deal
was announced.
This is by no means a unique story or any kind of aberration. This is just one of those
which talks about the potential costs and losses incurred due to malfeasance in the
corporate sector. There is no doubt whether or not the company violated any law or
not, but questions can be raised that whether its actions were really i.e. did the
company violate any obligation which asks them to obey the law or is this only valid
for a criticism for failing to analyze the risk-benefit equation instead of proper non-
compliance.
26

It is very well known that business decision makers usually encounter situations when
they can earn significant profits by making use of certain opportunities through illegal
and unethical behavior. This is more when the likelihood of getting caught is small or
the penalties or repercussions are considerably less. Therefore, when profits exceed
the cost of financial risks, should the companies be penalized for wrong actions?
An argument can be made for the view that companies and corporations do not have
any kind of obligation which forces them to follow the law is that they cannot have any
kind of moral obligations because of the nature of corporations. It is said that the
concept of morality or immorality do not hold for companies and all the rules and
regulations related to it are nothing more than bundles of contractual agreements.
It is believe that as per the company law, which sees a company as a separate entity
and not exactly as a human being, they are not "moral entities" as we are. This is one
of the arguments used to justify the action of Yahoo, when it collaborated with the
Chinese government to aid them in suppressing the human rights of journalists. It is
argued that it was merely fulfilling its sole responsibility as a company i.e. to make
money for the shareholders and ensure satisfaction of its customers.
Though the arguments seem to be valid and understandable, but are not at all practical
in nature. A company or an organization is not merely a "bundle of contracts"; instead
it is a body consisting of a number of assorted individuals who occupy a role which is
act-governed by a contract. Although it is only a "legal person" and not a physical one,
it always acts whenever the managers or the other associated and relevant employees
act on its behalf. The fact that it is these people who have a governing hand, and also
are bound by the law to respect human rights forces them not to use their power over
a position in an organization for wrong purposes. Since individuals and executives
have moral obligations through law, then there is no reason why getting employed by
a firm doing a business, exempt them from those duties and obligations.
The decisions they take and the actions they perform directly or indirectly help or harm
other people. The benefits from public goods, national defense, civil order, roads,
hospitals, schools etc. all are integral part of everyones life and decisions and
changes related to any of them affect everybody. Therefore, its not unreasonable to
27

agree that a company should function as a citizen, with certain obligations, including
obeying the law, even if it might be more profitable if it to ignored.
It is a misconception that favoring law instead of profits could harm the economy of a
country or the global corporate world. This ideology was shared by quite a few
corporate leaders who believed that it is not at all wrong for their companies to violate
laws whenever the gains through that method is likely to be greater than the risks
associated.
The costs of preventing these activities or noncompliance from damaging or
undermining the economy would undoubtedly be much greater than compared to what
they are now. The need of the hour is to enforce the laws strictly and grant the
regulatory agencies more responsibilities, power and funding compared to what the
citizens of a modern democracy would be willing to grant.
Hence, it is far better for a society, not just socially but also economically and politically
that the corporate leaders follow the track led by basic moral values such as respect
for the law and human rights and not profit-mongering and maximization at all costs.
Some examples of the growing seriousness towards business laws are-
1. In Serbia, many companies misunderstand tax regulation and pay penalties as
a result. Some taxpayers have taken to paying extra tax where they have no
liability just to insure against possible liability.
2. In Argentina, audited financial statements have to be filed annually regardless
of the size or activity of the trading entity.
3. In Venezuela, companies must keep their accounts in the Spanish language
and it is obligatory to keep them up to date. There are sanctions if the books
are more than one month behind.
4. If a company in the Netherlands with a history of late filings should face
bankruptcy, the liquidator is allowed to assume that the statutory directors
are personally liable for the bankruptcy unless proven otherwise.



28

Benefits of adherence to laws

Most companies break laws mostly because of the profits they can earn in a short run,
because of which they dont see the bigger picture. Adherence to laws may not help
in short run, but its benefits are conspicuous in the long run.

Companies and corporations rebel against rules, regulations and laws without
understanding the fact that they are there for their own benefits and not somebody
elses. For example, consider the consumer laws. Many traders fail to understand that
these laws are instrumental in order to improve the consumer-company relationship.
The strength of this relation is what defines the prestige of a corporation. Strong
relationship results in improvement in the status of the markets for better sales on the
part of these firms.

Instead, they go against the laws again and again and this causes more damage to
them in the long run, even if it helps in the short run. Laws are everywhere in each and
every field and proper adherence to them will ensure peace, impunity, harmony and
better co-existence and confidence in various relationships.

Other benefit could simply be boosting the image of a company in the eyes of
consumers as a law abiding company. Good image of the company is instrumental in
making employees feel more dignified and may increase job satisfaction and
consequently higher productivity. The boost in employee morale directly impacts
growth and dynamics of a firm.

Compliance with the norms, rules and laws helps in preventing activities which may
hurt the name of the firms permanently. These activities include criminal conduct by
corporations also. Getting a bad name could be extremely detrimental to a company
as the confidence of the consumers, employees, investors and shareholders depends
on the brand image, which is easily broken if any legal issues occur.

29

Another benefit which corporations can obtain is that they can save themselves from
huge expectations of the investors and therefore the consequences faced by them
when they are unable to fulfill them. What is meant here is that, if a company uses
illegal or wrong means to gain an upper hand in their business and succeed, then they
are expected to perform in a similar way. However, if the company works honestly,
then they may not deliver as well as they did earlier and it may raise suspicious or
reduce the companys stature.

Therefore, if a company works to its full potential while adhering to all the governing
laws, which is clearly measurable through its profits, turn-over and stock-price
analysis, then it can surely deliver up to its real capacity and maintain that efficiency
throughout. This is true because the efforts were sincere and the performance up to
true potential. It would also be devoid of any external interference. This way, correct
expectations can be associated to the company and it can work in a much more certain
environment, matching the investors and consumers expectations.
















30

IMPACTS OF TECHNOLOGY ON LAWS RELATED TO SALE OF GOODS AND
SERVICES ONLINE TRADE
THE ERA OF DOT COMS AND CHANGES IN LAW

Scenarios which can occur in online sale of goods and services; and consequences
in language of law:
1. Online Contracts
If there is a link on the site which says "Terms & Conditions of Website Use" &
then it links to any contract which governs use of that site, then in that case,
contract is enforceable, no matter web surfer has read it or not.
2. Digital Signatures (faxed)
One can enter into a contract with a digital or faxed signature and this does not
come under the fact that a signature should be in actual writing because such
a transmission signal is an audio signal via a telephone line which is containing
information and from which a writing can be accurately duplicated. But at the
same time, transmission of beeps & chirps along a telephone line is not a
writing, as that term is customarily used. Indeed, a facsimile transmission can
be created, received, transmitted, read and stored without a writing, or in the
conventional sense, hard copy in the technical vernacular, as having ever been
created.
3. Long distant courtrooms
Any website can give a power to court in a faraway state or country to hear a
case against other company. Being hauled into a faraway court can be
extremely expensive to the company & stressful for owners. One is more likely
to run into a problem here if his/her website takes orders from distant places
than if the website is really nothing more than an online brochure. Still, one
should consult with his tech lawyer about how to deal with these laws of distant
places. Some of the valuable recommendations might include having different
websites for the different countries to help ensure compliance with their local
laws, and also creating a user agreement that requires web surfers to litigate
any disputes in your local courthouse, and not in their courts.

31

TECHNOLOGICAL ADVANCEMENT AND ONLINE BUSINESS WITHIN THE LAW:
MANAGER S MUST KNOW

1. INFORMATION TECHNOLOGY ACT, 2000: (THE SPAM ACT, 2003)
An Act to provide legal recognition for transactions carried out by means of
electronic data interchange and other means of electronic communication,
commonly referred to as "electronic commerce", which involve the use of
alternatives to paper-based methods of communication and storage of
information, to facilitate electronic filing of documents with the Government
agencies and further to amend the Indian Penal Code, the Indian Evidence
Act, 1872, the Bankers' Books Evidence Act, 1891 and the Reserve Bank
of India Act, 1934 and for matters connected therewith or incidental thereto.
Information Technology Act 2000 addressed the following issues:
Legal Recognition of Electronic Documents
Legal Recognition of Digital Signatures
Offenses and Contraventions
Justice Dispensation Systems for Cybercrimes

2. BIOTECHNOLOGY PATENTS
Apart from usual goods and services, a patent can also be reserved for a
biological product which is none other but a genetically modified organism
or any other genetic material. It is a patent introduced for the inventions in
the field of biology which gives patentee a right to exclude others from using,
selling, making, import or export of invention for a limited period of time. This
is an emerging patent existing in Australia, Europe, Japan and United States
as of now.





32

3. INFORMATION TECHNOLOGY (AMENDMENT) ACT, 2008: (THE PRIVACY
ACT, 1988)
To cater the needs of the worldly known Privacy act, India passed and
added new rules to the existing IT act and these two sections are,
Section 43A, which deals with the implementation of sensible security
practices for delicate and sensitive personal data or information, thus
providing the compensation for the same of the person affected by wrongful
loss or may be wrongful gain.
Section 72A, which suggests for a fine up to Rs. 5,00,000 and/or the
imprisonment for a period up to 3 years for the accused who causes
wrongful loss or wrongful gain by releasing or disclosing personal
information or sensitive data of another person while providing services
which might be under the terms of contract.

4. THE ELECTRONIC TRANSACTIONS ACT 1999
The ETA is based on two principles:
1. Functional equivalence
Paper documents and electronic transactions are treated equally by the law.
2. Technology neutrality
The law does not discriminate between different forms of technology.
The ETA allows business and government to fulfil, in electronic form, any of
the following requirements:
Giving information in writing;
Providing a handwritten signature;
Producing a document in material form; and
Recording or retaining information.
The ETA also provides a legal framework for electronic contracting. The Act
is technology neutral in that
It enables electronic transactions to occur without prescribing the use of
particular types of technology.
The key sections are:
Section 8 General
33

A transaction is not invalid because it took place wholly or partly by means
of one of more electronic communications.
Section 10 Signatures
If the signature of a person is required, that requirement may be met by use
of an electronic method as long as:
The method is used to identify the person and to indicate their approval
of the transaction;
The method is as reliable as appropriate for the purposes of the
Transaction; and
The signature recipient consents.
Section 11 Documents
A person can produce a document in the form of an electronic
communication where other laws require the production of a paper
document.
Section 12 Records
If a person is required to record or retain information or documentation in
writing, that requirement can be met by retaining or recording the
information in electronic form.
In order to achieve national uniformity all States and Territories have passed
Electronic Transactions Acts that complement the commonwealths ETA.
This layer of state legislation therefore covers private sector transactions

RECENT E-COMMERCE HAPPENINGS AND LAW IMPLICATIONS

Cases filed against Google
1. By bharatmatrimony.com to the CCI
Recently, there was a case which has been filed by a matrimonial site
Bharatmatrimony.com against Google citing the discriminatory trade practices
related to its special AdWords program. This has been alleged by the appellant
that Google has abused its power of dominance by engaging itself in
discriminatory, unfair and retaliatory practices related to AdWords.
2. By CUTS, a non-profit consumer advocacy group
34

Last year, CUTS had also filed a case to the CCI, urging CCI to investigate the
possible anticompetitive conduct of Google in the e-commerce market, Indian
Internet, online advertising, and related markets.
3. Travel Portals of Europe
Travel portals like Expedia and TripAdvisor in Europe have filed anti-trust
complaints against Googles Flight Search with the European Commission for
disturbing fair competition and promoting rival services in the online travel
space.
Redefinition of e-commerce business structuring in India
The Department Of Industrial Policy and Promotion recently has issued a notification
which has become operational with the immediate effect. According to this notification,
Indian e-commerce companies might require to restructure their operations so as to
comply with the new definition of group companies. All this is in addition to existing
regulatory & business structuring requirements which are already in operation.
According to this latest notification, if any company is capable of exercising indirect or
direct voting right of at least 26% or if appoint at least half of the board in any other
company or the companies, then these companies are known to be group companies.
This essentially means that e-commerce companies now in India would be required to
decrease their stakes in any other companies or the joint ventures if they actually want
to source greater than 25% of products for sale in its retail stores.
This resulted in a demand to control e-commerce websites in India.
Telemedicine Laws in India
There is no doubt about the fact that whenever technology is used for some medical
purposes, it will give rise to medico legal and also to techno legal issues. Many
countries have realised the fact and so they have made up suitable laws to tackle this
type of medico legal or techno legal issues.
For instance, United States enacted the Health Insurance Portability & Accountability
Act, 1996 (HIPAA), Health Information Technology for Economic and Clinical Health
Act (HITECH Act), etc. that take care of medico legal or techno legal issues of
telemedicine and e-health. It is already high time for our Indian government to regulate
35

Internet related medical issues in India even before these issues become sources of
health hazards and big nuisance for Indian citizens.

Online Gambling and Betting Legal in India
The golden rule to decide that whether the online gambling is legal or not in India is
based upon many factors which depends upon the facts and conditions of each case
and also upon state to state. There are a lot of states in India where gambling is legal
and few where even online gambling and betting is legal. However, there are also
some states like Mumbai wherein online gambling is specifically prohibited and there
is a punishment or penalty for such act. So it depends entirely upon state where one
wish to carry out online gambling & betting business.
Finally, taxation and economic legislations like tax laws in India, company bill, anti-
money laundering laws, etc. are involved while operating online casinos, online
gaming platforms and online gambling and betting. Provisions of all these economic
legislations are very rigorous in nature and may cause great damage to the owner or
the operator of online casino, gaming or gambling and betting website.
E-commerce compliances and regulations in India
E-commerce is the latest emerging entrepreneur bandwagon of India. Hundreds of e-
commerce portals have recently emerged from the year 2012. However, in the
keenness of earning profit, major legal and compliance requirements relating to e-
commerce have been ignored by all the e-commerce portals.
Even the government of India is lax in implementing regulatory and compliance
requirements against illegal online pharmacies, online betting and gambling portals
and other similar portals.
There are a lot of techno legal compliance requirements which the e-commerce portals
should comply with. Internet intermediary liability, cyber law due diligence for Indian
companies must be keep in mind by several e-commerce websites or players.


36

CONCLUSION AND GROUP LEARNINGS

It is necessary that we understand the compliance issues regarding the sale of goods
and services. The explicit and implicit conditions show how detailed each issue faced
in the sale of goods and services is outlined. The judiciary has taken an active role in
ensuring that all parties receive fair treatment and anyone cannot be taken advantage
of by another party. The remedies available in the act ensure that judiciary can prevent
such errors. But, there is an ambiguity in the implied conditions and such uncertainty
can be overcome with reference to practical cases.
With the advent of e-commerce, and the trend of purchasing shifting towards it, the
complexity regarding any kind of sale has increase manifold and more stringent
compliance measures need to be followed.
Group Learnings:
Implied conditions on a sale are a guaranty by the seller weather stated or not
If a customer returns a good and complains, the seller can check the date claimed
Remedies are available to a buyer in case there is a breach in condition by a seller
Concept of digital and faxed signatures in e-commerce
Insights of company bill what to do and what not to do as a business manager
Genetically modified organisms comes under Biological products and can be
patented for a limited period of time
Taxation laws imposed on traders even in online trade
A web surfer is liable to contract of Terms and conditions of use when he/she uses
any website even if he has not read them, and this contract is enforceable by law






37

RELEVANCE

As a business manager we would be involved in industries where we would be
involved in providing goods and services to our customers. We need to know how this
act affects our customers and how can we be protected by the law with the use of this
act. Customers can claim refunds and exchanges which might be related to the
company policy, the time till which they can claim such refunds need to be known. We
need to understand that we as retailers are responsible for the quality of the goods we
sell. Weather we are an agent or the principle, we cannot change the right a customer
has. But regardless, the customer needs to be aware and check the goods before he
bought them. All such nuances are extremely important to know for the day to day
functioning of a retail business. As a decision maker, we need to understand to make
correct decisions when faced with a customer service issue and act within the
boundaries of the law. Lack of knowledge on this topic would result in serious loss to
the business as a whole.
Hence, the study is very important from the point of view of any aspiring business
manager.










38

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