Presentation

ON
Readings Of Law
 Contents
 Sales of good act 1930.
 Business ethics and contemporary
business decision.
 Paying for minimum interest rate
Guarantee .
 Wining performance.
 Legislation.
 SALE OF GOODS ACT, 1930
…..
 A contract where the seller transfers or agrees to
transfer the property in goods to the buyer for a price.

 Before the law of sale of goods act 1930, sale of goods

was governed by chapter VII of the Indian contract act,
1872, which is based on English common law.

 In India it was found out that the law of sales of goods

act is not sufficient to meet the needs of the Indian
community so it was decided to make changes in the
law .
There are different suggestion given by different members, few
of them are :-

 It has been suggested that definition of goods in clause 7

section 2 should also include , gas .electricity and water,
 The stock exchange of India has suggested that shares should
not be included in goods; it should be treated as actionable
claims.
 It has also been suggested by the government of Bihar that
the word good faith in section 27 should be given the same
meaning as in the section 52 of the Indian penal code.
 It was also suggested by the Bihar lawyers association that the
law of sales of goods acts should be made in writing on the
stamp paper.
Essential elements of a valid contract :-
 Offer an acceptance

 Legal relationship

 Lawful consideration

 Capacity of parities

 Mutual and free consent

 Lawful object

 Legal formalities

Essential characteristics of a contract of Sale :-

 TWO PARTIES

 TRANSFER OF PROPERTY

 GOODS

 PRICE

 BOTH ‘SALE’ AND AN ‘AGREEMENT TO SELL’

 NO FORMALITIES TO BE OBSERVED
 BUSINESS ETHICS ….
 There must be a contract of guarantee as Christians,
Jews and Muslims have to contend in their business
with ethical prescriptions.

 The principal aim is to study the application of

prohibition against interest to a specific contract
namely a commercial guarantee.

 The relevance for guarantees to the interest

prohibition is summarized by medieval commentator,
the guarantor role is secondary which defined by Jews
law secondary means implicit and explicit stipulation in
the contract.

 The second category of the guarantor is one who

accepts additional responsibility that is the lender can
 A guaranty is an accessory to contract by which a promise
undertakes to be answerable to the promise for the debt or
default of another person whose liability to the promise must
exist.
 The Jews have different rules and regulations regarding being a guarantor
also. It is stated that if a foreigner lends money to an Israelite it is forbidden
for another Israelite to enter as surety or guarantor , the reason behind this
is that when the lender will ask money from the surety the surety will in turn
ask money from the debtor.

 A guaranty is a person who agrees to be responsible for the debt or

obligation of another. Furthermore, a surety is also a "security against loss
or damage or for the fulfillment of an obligation, the payment of a debt, etc.;
a pledge, guaranty, or bond.
 Paying for minimum interest rate
Guarantee ….
 Pension is considered as saving in which the funding option are
based on accrual basis which guarantee a minimum rate and insure a
minimum growth rate of the individual person investment.

 The Pension scheme have minimum interest rate guarantee which is

considered as a part of contract, and is issued by the institution.

 Sometime investors are providing with guaranty that they will get a
principle amount back.

 The rate of guarantee is done on Pricing guarantee which is not done

without an assumption. It depends on the interest rate guaranty.
However it depends upon the investor to switch to risk free position.
 The utility loss of imposing minimum interest rate
guarantee as an exogenously constraint on the investor
ability to tailor portfolio.

 The objective of guaranty is to insure against adverse

change in interest rate.

 The other objective of saving plan is to pull on interest

rate with different risk attitude into a portfolio. The
investor with high level of relative risk is compensated
partially for loss, where Investor with a low level of
relative risk is suffering for a utility loss.
 Wining performance …..
 Peter qilkis had discussed the challenges to develop
contract that guarantee performance.
 The main difficulty arise in maintaining contract is the
concept of principle agent problem
 In short term transactions i.e. short contract the actual
causes of the failure is only known to the repairer.
 In long term transaction i.e. implied contract the difficult is
typically known which had lead to a new concept of
asymmetric information where only client or the services
provider known the relevant information.
 Performance based contract is considered as the future
based model for all long term maintanence which will
provide the added value for contract in global compitition
in market.
Under Long term performance based contract the
following factor are
crucial
 Physical area must be considered

 Plant availability should be a true measure of

effectiveness of the maintenance contract

 The payment must spited into standard guarantee

payment and performance payment

 Monitoring should be based on auditing principle.

 The risk must be limited to plant availability at the

same time minimizing the capital.

 Open book system must be employed which clearly

shows that how maintenance control cost is build up

marginal profit must be transparent..
 Incentive contract can be search of
control which provide maximum
chance to achieve them by the
services provider.
 Relationship contract is based on the
premise of an implied contract where
services provider behavior is consider
binding which should include risk
reward etc.