Manipal University Jaipur

Internal Assignments
Name - SHARAD BHARDWAJ
Roll No - 2314108031
Course Code & Name - DMBA302 & LEGAL ASPECTS OF BUSINESS
Semester- 3rd MBA

Q1 - What is meant by dissolution of a firm and dissolution of partnership? Under what

circumstances dissolution of firm takes place?
Ans - **Dissolution of a Firm** and **Dissolution of Partnership** refer to different aspects of
ending a business relationship or structure, though they are closely related.

### Dissolution of a Firm

**Definition**: The dissolution of a firm refers to the formal process of closing down a business
entity. This can occur for various reasons and involves winding up the firm's affairs, including
settling debts, distributing remaining assets, and completing legal requirements to cease
operations.
**Circumstances for Dissolution**:
1. **Voluntary Dissolution**: The firm decides to dissolve itself based on the agreement of its
owners or partners. This can occur due to strategic decisions, financial difficulties, or business
closure.
2. **Involuntary Dissolution**: The firm is dissolved due to external pressures such as legal
judgments, government orders, or regulatory actions.
3. **Completion of Purpose**: The firm may be dissolved once it has achieved its purpose or
completed its business activities for which it was established.
4. **Insolvency**: The firm may be dissolved if it is unable to meet its financial obligations and is
declared insolvent.
5. **Expiry of Term**: If the firm was established for a specific period or project, it will dissolve
upon reaching the end of that term or project.

### Dissolution of Partnership

**Definition**: Dissolution of a partnership refers specifically to the process of ending the

business relationship between the partners in a partnership. This does not necessarily mean that
the firm itself is dissolved; instead, it refers to the termination of the partnership agreement.

**Circumstances for Dissolution**:

1. **Mutual Agreement**: Partners may agree to dissolve the partnership voluntarily, often due to
changes in personal or business circumstances.
2. **Expiration of Term**: If the partnership was created for a specific duration or project, it will
dissolve upon the completion of that term or project.
3. **Achievement of Purpose**: The partnership may dissolve once it has fulfilled its purpose or
objectives as stated in the partnership agreement.
4. **Death or Insolvency of a Partner**: The partnership may be dissolved if a partner dies or
becomes insolvent, unless the partnership agreement provides for continuity.
5. **Legal or Regulatory Requirements**: Dissolution may occur due to legal or regulatory
reasons, such as non-compliance with laws or regulations.
6. **Court Order**: A court may order the dissolution of a partnership in cases of disputes or
irreconcilable differences between partners that prevent the partnership from functioning
effectively.
In summary, the dissolution of a firm involves closing down the entire business entity, while the
dissolution of a partnership specifically refers to ending the partnership agreement between the
partners. Dissolution can occur for various reasons, including mutual agreement, completion of
purpose, legal issues, or financial problems.

Q2 - Who is agent? Describe the rights of an agent against his principal.

Answer- An agent is a person or entity authorized to act on behalf of another, known as the
principal, to perform specific tasks or make decisions. The agent's role is to represent the
principal's interests and perform actions within the scope of the authority granted.

The rights of an agent against the principal typically include:

1. **Right to Remuneration**: The agent is entitled to be compensated for the services provided
as per the terms of the agreement or contract.

2. **Right to Reimbursement**: The agent has the right to be reimbursed for expenses incurred
while carrying out duties on behalf of the principal, provided these expenses were necessary and
authorized.

3. **Right to Indemnity**: The agent can seek indemnity from the principal for liabilities or losses
incurred while acting in good faith and within the scope of their authority.

4. **Right to Compensation for Loss**: If the agent suffers a loss due to the principal's breach of
duty or failure to fulfill their obligations, the agent can claim compensation.

5. **Right to be Protected from Unjustified Termination**: The agent is entitled to protection

against unfair or unjustified termination of their agency relationship, especially if it leads to
financial loss or damages.

These rights ensure that the agent is fairly treated and compensated for their role in representing
and acting on behalf of the principal.

Q3 - “All contracts are agreements, but all agreements are not contracts.” Discuss the statement
explaining the essential elements of a valid contract.
Answer- The statement "All contracts are agreements, but all agreements are not contracts"
highlights the distinction between a simple agreement and a legally enforceable contract.

**Agreement**: An agreement is a mutual understanding or arrangement between two or more

parties about their respective rights and duties. While all contracts are agreements, not all
agreements meet the criteria to be legally binding.

**Contract**: For an agreement to be considered a contract, it must satisfy specific legal

requirements. The essential elements of a valid contract include:

1. **Offer and Acceptance**: There must be a clear offer made by one party and an unequivocal
acceptance by the other party. Both parties must agree on the terms of the offer for a contract to
be formed.

2. **Mutual Consent**: Both parties must have a mutual understanding and consent to the terms
of the agreement. This consent must be free from factors such as duress, misrepresentation, or
undue influence.

3. **Consideration**: There must be consideration, meaning something of value (such as money,

goods, or services) must be exchanged between the parties. Consideration is what each party
gives up to the other as part of the agreement.

4. **Capacity**: The parties involved must have the legal capacity to enter into a contract. This
means they must be of legal age, mentally competent, and not disqualified by law.

5. **Legality of Purpose**: The contract's purpose must be lawful. Agreements that involve
illegal activities or go against public policy cannot be enforced as contracts.

6. **Intention to Create Legal Relations**: The parties must intend for their agreement to be
legally binding. Social or domestic agreements are typically not considered contracts unless
there is clear evidence of intent to create legal obligations.

An agreement lacking one or more of these elements cannot be considered a contract and,
therefore, cannot be enforced legally.
Q4 - State the essential elements of a contract of sale under the
Sale of Goods Act, 1930.
Ans - Under the Sale of Goods Act, 1930, the essential elements of a contract of sale are as
follows:

1. **Contractual Agreement**: There must be a clear agreement between the buyer and the
seller, which includes an offer by one party and acceptance by the other.

2. **Goods**: The subject matter of the contract must be goods, which are defined as movable
property. The goods must be identifiable and existing or future goods that are capable of being
delivered.

3. **Price**: The contract must stipulate a price for the goods. This price can be fixed at the time
of the contract or determined later, but it must be ascertainable.

4. **Transfer of Ownership**: The contract must involve the transfer of ownership or title of the
goods from the seller to the buyer. This transfer occurs when the buyer has paid the agreed
price and the seller has delivered the goods.

5. **Delivery**: The goods must be delivered to the buyer as per the terms of the contract.
Delivery refers to the transfer of possession from the seller to the buyer.

6. **Payment**: The buyer is obligated to pay the agreed price for the goods. Payment terms are
usually defined within the contract and must be adhered to.

These elements ensure that the contract of sale is valid and enforceable under the Sale of Goods
Act, 1930.

Q5 - Define a patent. Describe the procedure for obtaining a patent.

Answer- A patent is a legal right granted by a government to an inventor or assignee, giving them
exclusive rights to make, use, sell, or distribute an invention for a specified period, typically 20
years from the filing date. This right is intended to protect new, useful, and non-obvious
inventions, encouraging innovation by providing inventors with a temporary monopoly on their
creations.

**Procedure for Obtaining a Patent:**

**Procedure for Obtaining a Patent:**

1. **Determine Patentability**: Ensure the invention is novel, non-obvious, and useful. Conduct a
patent search to check if similar patents already exist.

2. **Prepare a Patent Application**: Draft a detailed patent application, including a description of

the invention, claims defining the scope of protection, and any necessary drawings. The
application should clearly describe how the invention works and its unique aspects.

3. **File the Patent Application**: Submit the application to the relevant patent office. In many
countries, this is done through a national patent office (e.g., the United States Patent and
Trademark Office (USPTO) in the U.S.) or an international body such as the World Intellectual
Property Organization (WIPO) for global patents.

4. **Examination Process**: The patent office will examine the application to ensure it meets all
legal requirements. This includes assessing the invention’s novelty, non-obviousness, and
industrial applicability. The examiner may request amendments or additional information.

5. **Publication**: In many jurisdictions, the patent application is published 18 months after the
filing date, making the details of the invention available to the public.

6. **Grant of Patent**: If the patent office determines that the invention meets all criteria, it will
grant the patent and issue a patent certificate. The inventor then enjoys exclusive rights to the
invention for the patent term.

7. **Maintenance Fees**: To keep the patent in force, maintenance or renewal fees must be paid
periodically according to the regulations of the patent office.

This process ensures that patents are granted to inventions that contribute to technological
advancement while providing inventors with the protection needed to benefit from their
innovations.

Q6 - What are the powers and functions of the Competition Commission?

Ans - The Competition Commission (often referring to a specific national body like the
Competition Commission of India) is responsible for enforcing competition laws and ensuring fair
market practices. Its powers and functions typically include:

1. **Anti-Competitive Practices**: Investigating and addressing anti-competitive practices such

as cartels, abuse of market dominance, and unfair trade practices that restrict or distort
competition.

2. **Merger Control**: Reviewing and approving mergers and acquisitions to prevent

concentration of market power that could harm competition. This involves assessing whether
proposed mergers would significantly reduce competition in a market.

3. **Market Inquiry**: Conducting market inquiries to assess and understand competitive

dynamics in specific markets. This helps in identifying systemic issues affecting competition.

4. **Enforcement Actions**: Taking enforcement actions against companies found to be violating

competition laws, which may include issuing cease-and-desist orders, imposing penalties, or
ordering corrective measures.

5. **Advisory Role**: Providing advice and recommendations to the government on competition

policy and law reforms. This includes suggesting legislative changes to enhance market
competition.

6. **Consumer Protection**: Promoting consumer welfare by ensuring competitive practices that

benefit consumers through better prices, quality, and choices.

7. **Education and Advocacy**: Raising awareness about competition laws and practices among
businesses, consumers, and other stakeholders. This includes organizing workshops, seminars,
and public outreach programs.

These functions enable the Competition Commission to maintain competitive markets, prevent
monopolistic practices, and protect consumer interests.