Fire insurance is the oldest form of insurance. In the early development of industrial society, fire was the main source of energy. The industrial or commercial activities were not possible without fire. However, there was a need to insure the risk of uncontrolled or uncertain fire. Fire insurance is designed to provide for financial loss to property due to fire and a few other related hazards. The property that can be covered under fire insurance includes Building, Machinery, Equipments, Accessories, Goods, Raw Materials, Electrical Installation of building, Residential houses, Furniture and fittings, Pipelines located outside and inside the building. A contract of fire insurance is a contract whereby the insurer undertakes, in consideration of the premium paid, to make good any loss or damage caused by fire during a specific period. The fire insurance contract specifies the maximum amount which the assured can claim in case of loss. This amount Continue reading
Mercantile Law
Discharge of a Contract by Breach
Discharge of contract means parties to the contract is no more liable to the contract. In other words, the liability of the parties to the contract will come to an end. Discharge by breach of contract: Breach of contract by a party thereto is also a method of discharge of a contract, because “breach” also brings to an end the obligations created by a contract on the part of each of the parties. Of course the aggrieved party i.e., the party not at fault can sue for damages for breach of contract as per law; but the contract as such stands terminated. Breach of contract may be of two kinds: (1) Anticipatory breach; and (2) Actual breach. Anticipatory breach: An anticipatory breach of contract is a breach of contract occurring before the time fixed for performance has arrived. It may take place in two ways: (a) expressly by words spoken Continue reading
Features of Negotiable Instruments
Negotiable Instrument, in law, a written contract or other instrument whose benefit can be passed on from the original holder to new holders. The original holder (the transferor) must countersign the instrument (as in the case of a cheque) or merely deliver it (as in the case of a bank note) to the new holder; the new holder is then entitled to the benefit of the instrument (in the case of a cheque, to the money from the bank; in the case of the bank note, to the sum promised on the note). According to section 13 of the Negotiable Instruments Act, 1881, a negotiable instrument means “Promissory note, bill of exchange, or cheque, payable either to order or to bearer”. Major features of negotiable instruments are; Easy Transferability- A negotiable instrument is freely transferable. Usually, when we transfer any property to somebody, we are required to make a transfer Continue reading
Quantum Meruit in Business Law
‘Quantum meruit’ literally means ‘as much as earned’ or ‘as much as is merited’. When a person has done some work under a contract, and the other party repudiates the contract, or some event happens which makes the further performance of the contract impossible, then the party who has performed the work can claim remuneration for the work he has already done. Likewise, where one person has expressly or impliedly requested another to render him a service without specifying any remuneration, but the circumstances of the request imply that the service is to be paid for, there is implied a promise to pay quantum meruit, i.e. so much as the party rendering the service deserves. The right to claim quantum meruit does not arise out of contract as the right to damages does; it is a claim on the quasi-contractual obligation which the law implies in the circumstances. The claim Continue reading
Different Types or Classification of Agents in Business Law
An “agent” is a person employed to do any act for another, or to represent another in dealing with third persons. The person for whom such act is done, or who is so represented, is called the “principal”. Read: Principal-Agent Problem in Business Law As between the principal and third persons, any person may become an agent, but no person who is not of the age of majority and sound mind can become an agent, so as to be responsible to the principal according to the provisions in that behalf herein contained. No consideration is necessary to create an agency. The authority of an agent may be express or implied. An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, Continue reading
Company – Definition, Meaning and Characteristics
A company can be defined as a group of persons associated together for the purpose of carrying on a business, with a view to earn profits. The word ‘Company’ is an amalgamation of the Latin word ‘Com’ meaning “with or together” and ‘Pains’ meaning “bread”. Thus, a company is nothing but a group of persons who have come together or who have contributed money for some common person and who have incorporated themselves into a distinct legal entity in the form of a company for that purpose. There is very good definition by Lord Justice Lindey, “A company is an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business and who share the profit and loss arising there from. The common stock so contributed is denoted in money and is the capital of the company. The persons Continue reading