Contracts in India: Business Law (Management)

The Indian Contract Act, 1872 prescribes the law relating to contracts in India. Based on the circumstances, the act ensures that promises made by the parties to a contract are legally binding and the law enforces these rights and duties.

MBA questions on employment contracts:

Q. Explain the statement “All Contracts are Agreement but all Agreements are not Contract” and provide two (2) examples demonstrating this statement

Q) Nisha, just fresh out of college, entered into an employment contract with Sriram Enterprises having its base in Mumbai. Please give your answer in 2 circumstances arising below:
a. Nisha at the time of entering into employment contract was 17 years 11 months but she joined the company after completing 18 years and started working only after competing 18 years. After being employed for more than a month, Ram another employee on realizing this complained to HR. Upon realizing this, HR cancelled her employment without any notice and kept her salary on hold, thus refused to pay any salary due and payable. Can Nisha sue the company for wrongful termination?
b. Nisha was appointed for the post of junior sales executive and assuming if the appointment and contract were valid, the company had inserted a non-compete clause where Nisha could not forever join any competitor of the company? Is such a clause legally valid under the Contract Act, 1872

Q) What is the difference between valid, void or voidable contract. Please explain the instances when a contract becomes valid, void or voidable contract.

Q) Please give at least two (2) real life examples on how the recent amendments in Companies Act, 2013 has brought about sweeping changes in corporate scenario of India.

Q) Arun and Smitha are good friends since a long time. Smitha is in need of a house loan with a bank and Arun has agreed to be a be a co-applicant cum “guarantor” to help Smitha secure the house loan. Smitha after taking possession of the Flat started defaulting payments of the house loan and absconded. In light of the above instance, you are called to advise the bank on the following queries:
a. What is the contract between Arun, Smitha and the bank termed as? Identify Arun, Smitha and the bank according to their roles in such contract?
b. Does the bank have any right against Arun? If yes please explain in detail? If, Arun voluntarily offers to pay the loan to the Bank, what are his rights? Please explain in detail?

Q) Karan and Arjun had entered into a contract where Karan was to supply 50,000 phones to Arjun within 2 months from the date of signing of contract. Karan was to procure the phones from China and deliver the same to Arjun. The rate of the phone was Rs. 5000/- a piece (inclusive of all taxes and duties). At the time of the execution of the contract, the duty was at 5% (five percent). Immediately after the execution of the Agreement, India had increased the duties to 1000% (one thousand percent). Therefore, Karan was finding it difficult to sell the phones at the price agreed earlier. In the circumstances, kindly advice:

a. How can Karan discharge such a contract?
b. How can Arjun enforce such a contract?

Website: The Indian Contract Act, 1872

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