Business Law
Following are the Distinguishes which covers Module 1 and Module 2
1) Difference between Offer and Acceptance
[Link] Offer Acceptance
1. It is the First Stage in the Formation of a It is the Second stage in the formation of a
Contact contract
2. An Offer is made by the offeror to the An Acceptance is given by the offeree to the
offeree. offeror
3. An offer is not held to be made until it is An Acceptance may be held to tbe made
brought to the knowledge of the offeree(i.e though it has not come to the knowledge of the
Communicated to the offeree) offeror(i.e., though it is not communicated to
the offeror)
2) Difference between Agreement and Contract
[Link] Agreement Contract
.
1. Enforceability: Offer and Acceptance together Agreement and enforceability together
constitute an agreement. constitute a contract
2. Legal Obligation: certain agreements may not A contract necessarily creates an legal
create any legal obligation obligation
3. Binding on Parties: An agreement is not Whereas a contract is always a concluded
always a binding contract. and binding agreement
4. Specialty: An Agreement is a genus i.e., wider Contract is specie of an agreement
concepts than a contract
3) Difference between void Agreements and Voidable Contract
[Link] Fraud Misrepresentation
1. Intention: Both in fraud and misrepresentation, Here the person making it honestly
there is a statement which is false; but in fraud the believes it to be true or does not know to
statement is made with the knowledge that it is be false
false or without believing in its truth.
2. Damages: The Party aggrieved by fraud can sue In the case of an innocent
the person guilty of the fraud for damages he may misrepresentation, the aggrieved party
have suffered by the reason of the fraud. cannot sue for damages, but can only
avoid the agreement.
3. Rescission: In case of fraud, this right can be The Remedy of rescission of the contract is
exercised even after the contract has been available when the contract is vitiated by
performed. innocent misrepresentation.
4. Where truth can be discovered with ordinary In Misrepresentation, the aggrieved party
diligence: In case of fraud, as a rule, the contract is cannot avoid the contract if it had the
voidable even though the aggrieved party had the means of discovering the truth with
means of discovering the truth with ordinary ordinary diligence.
diligence.
5. Criminal Act: Fraud, in certain cases, can be a Misrepresentation of the fact does not
criminal act and punishable under the Indian Penal show any criminal intent on the part of the
code. maker of the statement and it is not
criminally punishable.
6. Silence: In certain cases(fraudulent) silence can be As in the case of contracts of uberrimae
construed as fraud fidei, but silence cannot constitute an act
of misrepresentation.
4) Different between Bailment and Pledge
[Link]. Pledge Bailment
1. Objective: It is Security for the payment of It can for any purpose
debt or Performance of a promise
2. Law:In case of default by the pawnor to It is depend on Bailee . he may or may not retain
repay the debt, the pawnee may sell the
goods pledged with him
3. Use: The pawner or pledgee has no right It is Bailee’s wish
to use the goods pledged with him.
5) Different between Contingent Contract and Wagering Agreement:
[Link] Wagering Agreement Contingent Agreement
1. Consist of reciprocal promises May not consist of reciprocal promises
2. Essential of contingent nature May not be of wagering nature
3. Sole interest of winning or losing of the Agreed Parties’ Interest
amount
4. The future event is the sole determine factor. Depend on future event
5. Void Valid
6) Different between Agent and Servant
[Link] Agent Servant
.
1. An Agent is employed to act on behalf of the A servant generally does not enjoy such
principal and to bring him into legal relations authority.
with third parties.
2. An Agent, though bound to follow the A principal has a right to direct what that the
instructions of the principal is not subject to agent has to do; a master has not only that
the direct control and supervisions of his right but also the right to say how it is to be
employer done.
3. A Principal is liable for only those acts of his An Employer is liable for the wrongful acts of
agent which are done within the scope of the the servants, if such acts are committed in the
authority and is not liable for those acts of the course of employment.
agent which are done outside the scope of
such authority.
4. The Main effect of an agent is to make a A servant is employed to act for the employer,
contract. Agent necessarily contemplates a not resulting in the contract between the
third party but in service a third party may not master and a third person
exist.
7) Bill of Exchange and Promissory Note
[Link]. Bill of Exchange Promissory Note
1. Number of parties: there are three There are only two parties to a pro-note
parties in the case of an bill of exchange, exchange, viz., maker and payee. Hence it is two-
Viz., Drawer,Drawee(Acceptor) and Payee. party paper.
However, one person may assume any of
the two capacities of the three
2. Order and Promise: A bill Contains an A Pro-Note contains an unconditional undertaking
unconditional order. or promise.
3. Nature of relationship: A bill arises usually A Pro-Note is based on a debtor-creditor
upon the basis of a creditor-debtor relationship, i.e., the maker of a pro-note is
relationship. The drawer of a bill is the debtor and the payee is creditor
creditor and the drawee is the debtor.
4. Acceptance: A bill needs to be accepted to No such acceptance is required; a pro-note is
make it valid. The drawee put his signed by the maker only.
signature as acceptor(Bill payable on
demand do not require acceptance)
5. Nature of liability: The liability of the The liability of the maker of a pro-note is primary
drawer of a bill is secondary and and absolute because he himself is the main
conditional. The drawee or the acceptor is debtor.
primarily liable.
6. Immediate relation: The drawer(maker) of The maker of a note stands in immediate relation
a bill stands in immediate relation with the with the payee.
acceptor and the payee.
7. Notice to prior parties: when a bill is Notice of dishonor need not be given to the
dishonored either by non-payment, due maker of a pro-note.
notice of dishonor must be given by the
holder to all prior parties(including drawer
and intermediate endorses)
8. Sets: Foreign bills are drawn in sets(of Pro-notes are not so drawn
three or four)
9. Protest: Foreign Bills must be protested for No such protest for dishonor is required for
dishonor when such protest is requires by foreign Pro-Notes.
the law of the place where they are drawn
10. Conditional Acceptance: A Bill may be The maker of the pro-note cannot attach any
accepted conditionally such condition to it.
11. Acceptor fro Honour: A bill may be A Pro-note cannot be paid for honour
accepted conditionally
12. Payable to the maker himself: A bill may A pro-note cannot be made payable to the maker
be payable to the maker(drawer) himself himself.
when the drawer and the payee are one
and the same person.
8) Bill of Exchange and Cheque
[Link] Bill of Exchange Cheque
1. May be drawn on any person or bank Always drawn on an Bank
2. Must be accepted Acceptance not required
3. May be paid on demand or expiry of a Always payable on demand immediately
fixed period
4. In certain cases three grace days allowed Grace days not allowed
5. Must be stamped Stamped not required
6. Cannot be crossed It can be crossed
7. May be noted or protested for dishonor Not required to be noted or protested
8. Cannot be counter minded(Oppose) Can be Counter minded(oppose)