Regulatory Requirements:Contract Law


Essential Elements of a Contract
Breach of Contract
Classification of Contracts
Special Types of ContractsThe Law of Contracts is the basis of business law because the bulk of transactions of the people engaged in trade, commerce and industry is based on contracts. In India, the Law of Contracts is contained in the Indian Contract Act,1872. The Act lays down the general principles relating to formation, performance and enforceability of contracts and the rules relating to certain special types of contracts like, Indemnity and Guarantee; Bailment and Pledge, and Agency. The Partnership Act; the Sale of Goods Act; the Negotiable Instruments Act; the Companies Act, though technically belonging to the Law of Contracts, have been covered by separate enactments. However, the general principles of the Contract Law are the basis for all such contracts as well.
The principal features of the Law of Contract are:-
The parties to the contract make the law for themselves.
The Act is not exhaustive since it does not take into its purview all the relevant legislations.
It does not override customs or usages.
The Law of Contracts is not the whole law of agreements.
As per the Indian Contract Act,1872, a "contract" is an agreement enforceable by law. The agreements not enforceable by law are not contracts. An "agreement" means 'a promise or a set of promises' forming consideration for each other. And a promise arises when a proposal is accepted. By implication, an agreement is an accepted proposal. In other words, an agreement consists of an 'offer' and its 'acceptance'.
An "offer" is the starting point in the process of making an agreement. Every agreement begins with one party making an offer to sell something or to provide a service, etc. When one person who desires to create a legal obligation, communicates to another his willingness to do or not to do a thing, with a view to obtaining the consent of that other person towards such an act or abstinence, the person is said to be making a proposal or offer.
An agreement emerges from the acceptance of the offer. "Acceptance" is thus, the second stage of completing a contract. An acceptance is the act of manifestation by the offeree of his assent to the terms of the offer. It signifies the offeree's willingness to be bound by the terms of the proposal communicated to him. To be valid an acceptance must correspond exactly with the terms of the offer, it must be unconditional and absolute and it must be communicated to the offeror.
An "agreement" is a contract if 'it is made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and is not expressly declared to be void'. The contract must be definite and its purpose should be to create a legal relationship. The parties to a contract must have the legal capacity to make it. According to the Contract Act, " Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of a sound mind, and is not disqualified from contracting by any law to which he is subject". Thus, minors; persons of unsound mind and Persons disqualified from contracting by any law are incompetent to contract.
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Related Links:
Ministry of Law & Justice
Indian Contract Act, 1872
The Companies Act, 1956
The Partnership Act 1932
The Sale of Goods Act 1930
The Negotiable Instruments Act 1881


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Regulatory Requirements
An entrepreneur, while managing his business has to take into account the basic regulatory requirements for his organisation. These regulatory requirements ensure that the organisation is functioning as per the statutory framework of the country. The most important regulation is the Indian Contract Act,1872, which regulates all the transactions of a company. It lays down the general principles relating to the formation and enforceability of contracts; rules governing the provisions of an agreement and offer; the various types of contracts including those of indemnity and guarantee, bailment and pledge and agency. It also contains provisions pertaining to breach of a contract. The next important regulation relates to quality management by a firm. Bureau of Indian standards has been set up by the Government for enforcement of quality standards in the country. BIS has adopted the ISO 9000 standards set up by International Organization for Standardization(ISO) for quality control. The ISO 9000 series is among ISO's most widely known standards ever. It provides a framework for quality management throughout the processes of producing and delivering products and services for the customer. BIS also provides certification against IS/ISO 9001:2000 under its Management Systems Certification activity. An organization can obtain a licence under the Quality Management System Certification (IS/ISO 9001:2000) Scheme/QMSCS of BIS. The scheme covers a wide range of industry and service sectors including engineering, chemicals, pharmaceutical, cement, ceramics, food, textiles, automotives, mechanical, metallurgical, electrical, electronics, aeronautics, hospitals, financial, banking services, construction, hospitals, wholesale & retail trade, education& training, hotel, power, printing, telecommunications, testing laboratories and information technology. A sound quality control mechanism ensures that a firm produces products that match international standards and thus boost the growth of the firm.
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Quality Management

Contract Law





Related Links:
Bureau of Indian Standards(BIS)
Ministry of Law & Justice


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Regulatory Requirements: Quality Management:Bureau of Indian Standards (BIS) and ISO 9000

Bureau of Indian Standards Act,1986 is the governing Act in India for the preparation and enforcement of standards. The Act extends to whole of India. Under the Act, the Central Government has set up, Bureau of Indian Standards(BIS) renamed for Indian Standards Institution(ISI) as the National Standards Body of India for promoting and nurturing the standardization movement in the country. Under the Provisions of BIS Act 1986 and rules and regulations framed therein, Bureau of Indian Standards is operating various Management Systems Certification Schemes under which licences are granted to various industry and service organizations:-
Quality Management Systems Certification Scheme - IS/ISO 9001 (QMS)
Environmental Management Systems Certification Scheme - IS/ISO 14001(EMS)
Occupational Health and Safety Management Systems - IS 18001 (OHSMS)
Hazard Analysis Critical Control Point - IS 15000 (HACCP) certification
Bureau of Indian Standards(BIS) is a founder member of ISO (International Organization for Standardization). ISO is a worldwide federation of national standards bodies that aims to provide a single set of standards that people worldover would recognise and respect. The objective of ISO is to promote the development of standardization and related activities in the world with a view to facilitating international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity. ISO's work programme ranges from standards for traditional activities, such as agriculture and construction, through mechanical engineering, to medical devices, to the newest information technology developments, such as the digital coding of audio-visual signals for multimedia applications.

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