This document discusses the definition and key aspects of business law and the law of contracts in India. It notes that law consists of rules and principles established by authority to regulate behavior. The Indian Contract Act of 1872 is the main legislation governing contract law in India. It originally covered contracts related to sale of goods and partnerships, though these are now covered separately in the Sale of Goods Act and Partnership Act. The objective of contract law is to ensure rights and obligations created by agreements are upheld. It creates two types of legal rights - rights in rem against the world, and rights in personam against specific individuals.

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2. LAW
• Law is a system of rules
• Law operates to regulate the actions of persons
with respect to one another and entire group or
society and the state
• Law denotes rules and principles established by
authority whether in the form of legislation or
self imposed customs applicable to people. These
are enforced by state to regulate behavior of
individuals and groups (business firms) to secure
justice, peaceful living and social order.

3. LAW
From the above statement it is clear that law
consists of
• rules and principles
• established by authority
• in the form of legislation or self imposed
customs applicable to people.

4. LAW
Definition
Salmond says, “Law is the body of principles
recognized and applied by the state in the
administration of justice”.

5. LAW
• Law being wider subject touches all walks of
our life
• There are various branches of law concerning
specific aspects, example: civil, criminal,
administrative, constitutional, business, labor
laws etc.,
• The legal framework within which different
business firms have to operate are largely
governed by General Laws applicable to all
forms of organizations irrespective of their
size and ownership. These laws fall into the
category of Mercantile law

6. LAW
• The terms ‘Business Law’, ‘Commercial Law’ and
‘Mercantile Law’ are synonymous
• Business Law deals with rights and obligations
arising out of mercantile transactions among
mercantile persons
• Business Law denotes the aggregate body of legal
rules connected with trade, industry and
commerce
• Business Law or Mercantile Law include law
relating to contracts, sale of goods, Negotiable
Instruments, Partnership, companies, insurance,
carriage of goods, insolvency, consumer
protection etc.,

7. HISTORY OF INDIAN CONTRACT ACT, 1872
• Law relating to Contracts in India is contained
in the Indian Contract Act, 1872
• The Act came into force on the 1st September,
1872
• This Act is applicable to the whole of India
(including Jammu & Kashmir)

8. HISTORY OF INDIAN CONTRACT ACT, 1872
The act as enacted originally had 266 sections
divided into the following groups;
• General Principles of Law of Contract (Sec 1-75)
• Contracts relating to Sale of Goods Sec (76-124)
• Special kinds of Contracts Sec (125-238)
(indemnity, guarantee, bailment & pledge)
• Contracts relating to Partnership (Sec 239-266)

9. HISTORY OF INDIAN CONTRACT ACT, 1872
• Sec 76-124 relating to sale of goods were
repealed in 1930 and a separate act, called the
Sale of Goods Act was enacted
• Sec 239-266 relating to partnerships were
repealed in 1932 and a separate act, called the
Partnership Act, was enacted

10. HISTORY OF INDIAN CONTRACT ACT, 1872
The Act at present has been divided into 2 parts;
• General Principles of Law of Contract (Sec 1-
75)
• Special kinds of Contracts Sec (125-238)
(indemnity, guarantee, bailment & pledge)

11. LAW OF CONTRACT
• Man is by nature a social being. He comes into
contract with others individuals in different
capacities. For example, he comes into contact
with landlord as a tenant, with government, as a
taxpayer, with customers as a seller and with
suppliers as a buyer.
• The contracts or associations are the inevitable
consequence of modern civilization
• Such contracts create legal relations giving rise to
certain rights and obligations.

12. LAW OF CONTRACT
• The object of law of contract is to ensure that
the rights and obligations created by a
contract are honored
• Anson says, “the law of contract is intented to
ensure that what a man has been led to
expect shall come to pass, that what has been
promised shall be performed.”

13. LAW OF CONTRACT
Law of Contract creates two rights
Right of a
person against
the whole
world
Right of a
person against a
particular
person
RIGHTS IN
REM
(JUS IN REM)
RIGHTS IN PERSONAM
(JUS IN PERSONAM)

14. LAW OF CONTRACT
Law of Contract creates two rights
Ex; Mr. X sells his House to Mr. Y
Mr. Y enjoys Rights in
Rem, as against whole
world, as the possession
of the house
Mr. X enjoys Rights in
Personam as against Mr.
Y to receive payment for
sale of house
RIGHTS IN REM
(JUS IN REM)
RIGHTS IN PERSONAM
(JUS IN PERSONAM)