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Sri Lanka Institute of Information Technology
Legal Environment for Business BM 103-2017
Individual Assignment (Report)
Le...
1
Sri Lanka Institute of Information Technology
Faculty of Business
Submission of Individual Assignment
Date of Assignment...
2
Sri Lanka Institute of Information Technology
Individual Assignment (Report)
Ravi is 17 years old boy. He is studying in...
3
Sri Lanka Institute of Information Technology
Introduction to Law of Contract
Contract - and entering in to contracts – ...
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Sri Lanka Institute of Information Technology
1. Contracts binding during minority.
2. Voidable contracts.
3. Void contr...
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Sri Lanka Institute of Information Technology
(2) Contracts for the benefit of the minor
The contract must be for his be...
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Sri Lanka Institute of Information Technology
Ravi is 17 years old boy and he is a student of International School Colom...
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Sri Lanka Institute of Information Technology
References
https://www.hg.org/article.asp?id=34024
https://contracts.usleg...
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Sri Lanka Institute of Information Technology
Special Thank
Lecturer – Mr. Lakshman Premasiri
Coordinator – Ms. Chalani ...
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LEB Individual Assignment

SLIIT Faculty of Business Year 01 Semester 02 Legal Environment For Business Assignment

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LEB Individual Assignment

  1. 1. Sri Lanka Institute of Information Technology Legal Environment for Business BM 103-2017 Individual Assignment (Report) Lecturer – Lakshman Premasiri
  2. 2. 1 Sri Lanka Institute of Information Technology Faculty of Business Submission of Individual Assignment Date of Assignment: 27.04.2016 Due Date: 05.2017 Date of Submission: 05.2017 1. Course: Bachelor of Business Administration 2. Year: 1 3. Semester: 2 4. Module Code: BM103 5. Module Name: Legal Environment for Business 6. Lecturer-in-charge: Mr. Lakshman Premasiri 7. Title of assignment: Law of Contract 8. Supervisor: Ms. Chalani Kuruppu Declaration: I certify that: • This assignment is my own work, based on my personal study and/or research. • I have duly acknowledged all material and sources used in the preparation of this assignment. • Neither the assignment, nor a substantial part of it, has been previously submitted for assessment in SLIIT or any other institution. • I have not copied in part, or in whole, or otherwise plagiarized the work of other students. I am fully aware of the rules and regulations of SLIIT regarding plagiarism and exam malpractices. I understand that I am liable to bear the consequences of (anyone involved in) plagiarism. • The use of any material in this assignment does not infringe the intellectual property/copyright of a third party. • All resources documents/reference materials are attached to this document. Student ID Student Name Signature BM16432376 G.S.W. Yuresh Nadishan
  3. 3. 2 Sri Lanka Institute of Information Technology Individual Assignment (Report) Ravi is 17 years old boy. He is studying in an international school in Colombo and is boarded at his uncle’s home. Ravi’s parents are wealthy and he gets pocket money of 15,000 – 20,000 rupees a month which he spends almost entirely buying various items from a nearby shopping complex. One month Ravi’s parents delayed to send him money. However, since he was well known in the shopping complex he entered into the following contracts promising to make payments when his money arrived. Purchase of a pair of designer jeans Purchase of a history book for his studies Purchase of a gold pendent for his girlfriend A computer course of one year’s duration. However, when Ravi received his money, he refused to make the payments though he did not return any of the items and continued to attend the computer class. Discuss Ravi’s liability under the contracts. Discuss Ravi’s liability under the contracts. Other Information Total Marks 20 Date of Submission of the Report – 19th May 2017 Word limit-1000
  4. 4. 3 Sri Lanka Institute of Information Technology Introduction to Law of Contract Contract - and entering in to contracts – forms an inseparable part of our day today life. Boarding a bus, buying a packet of meal, buying a broadband connection, getting in to phone booth and all such everyday activities involve contracts. The house we rent, the electricity that is supplied, the phone and cable we use, all these come to us through contracts. As well as big commercial projects, for example those for building highways and exploration of natural gases, also arise from contractual relationships. Definition of Contract A contract is a legally binding agreement made between two or more parties with the intention of creating legally binding relationship. There is no legal requirement that a contract should be in writing. Law of Contract and Minors Can a Minor Enter into a Contract? Yes, a minor can legally enter into a contract. However, whether the contract is enforceable will depend on a number of factors. Minority Minority in all legal systems considered as a condition or status requiring special protection. Minority is a condition in the life of a person. Minors have special protection of the law and they should not be made parties to any contract which is not beneficial to them. A minor is a person who has not attained ‘full age’ or age of majority. In Sri Lanka under the Age of Majority Ordinance NO.7 of 1865 the age of majority is 18 years. A minor is a person under 18 years old. Contracts made by a minor may fall into following categories.
  5. 5. 4 Sri Lanka Institute of Information Technology 1. Contracts binding during minority. 2. Voidable contracts. 3. Void contracts. 1. Contracts binding during minority A minor is bound by contracts made (1) For necessaries and (2) Contracts made for the benefit of the minor. (1) Contracts for Necessaries Necessaries are not restricted to things which are required to maintain a bare existence, such as food, clothes, shelter but includes articles which are reasonably necessary to the minor having regard to his station in life. A watch, and a bicycle may be considered as necessaries, but not articles of adornment and luxury. Goods are not the only necessaries. The hire of a car may be a necessary. A minor is only liable for necessaries when the goods are (1) suitable to the condition of life of the minor. (2) necessary to the requirement of the minor at the time of sale (3) necessary to the requirements of the minor at the time of delivery (4) goods with which the minor was not sufficiency supplied at the time of sale and delivery. A minor must pay a reasonable price for necessaries supplied to him. In Nash Vs Inman (1908) 2K.B.1, Inman, a minor and an undergraduate at Cambridge bought eleven fancy waistcoats from Nash. He was at the time adequately provided with clothes. Court held waistcoats were not necessaries and the minor was not liable to pay for any of waistcoats, supplied by Nash.
  6. 6. 5 Sri Lanka Institute of Information Technology (2) Contracts for the benefit of the minor The contract must be for his benefit having regard to his position in life and the other circumstances of the case. The burden of proof is on the party seeking to bind the minor to his contract. Contracts of service and apprenticeship would be considered as for the benefit of the minor. In Attorney General Vs Costa, (1922) 24 NLR 281, a minor entered into a bond with the government to go through a training programme at a teachers’ training college and thereafter to be a teacher in a registered school for five years. Court held that the bond was for the benefit of the minor the contract was binding on her. (3) Voidable Contracts These contracts are voidable in the sense that they are valid and binding upon a minor unless he repudiates them during minority or within a reasonable time after attaining majority. They are confined to contracts by which the minor requires an interest in some subject matter of a permanent nature, a subject matter to which continuous or recurring obligations are incidents. But after he attains full age, it will be binding on him unless he avoids it within a reasonable time. (4) Void Contracts Contracts that involves an obvious detriment or disadvantage to a minor is void. Ex: - contracts of loan or lend money to minors or get them to sign as guarantors or sureties for debts of others. Such contracts may be void because prejudice or detriment to the minor is presumed in such cases. Banks and other financial institutes should not lend money to minors or make them guarantors for the debts of others.
  7. 7. 6 Sri Lanka Institute of Information Technology Ravi is 17 years old boy and he is a student of International School Colombo. As well as he is a minor. His parents are wealthy and rich. The law of contracts involving a minor in accessing goods on credit with a promise to pay later is only enforceable if the goods borrowed help the minor in meeting his basic needs such as food, shelter and clothes. Also, the minor is liable to pay if the goods supplied if they are in line of improving his immediate welfare such as advancement in learning. Therefore, in the contract involving access a pair of jeans, Ravi will be expected to pay since according to their living standards, a designer Jean is a basic need to protect Ravi from harsh environmental condition and to uphold his social status. Thus, Ravia is liable in this contract. Ravi has to pay reasonable amount for pair of designer jeans. The contract involving the purchase of a history book for his studies is legally binding since it was meant to advance his personal well-being. Education is one of his right and thus he should compensate the shopkeeper after receiving the money. He is liable for this contract. The contract involving purchase of golden pendant for his girlfriend is not legally budding since it does not serve to meet his basic and immediate needs. Golden pendent is not necessary for his day to day basic requirements. The shopkeeper will not succeed in asking the money from Ravi since it is not enforceable under the law of contract. Therefore, Ravi is not liable for this contract. A computer course of one year’s duration is essential for his studies and this computer course is very important to improve his soft skills. Because of studying computer science, his knowledge, skills and attitudes should be develop. Enter into one-year computer course is the contract for benefits of Ravi. Therefore, the contract involving the one-year computer course on credit is legally enforceable and thus Ravi is liable. He has to pay for computer course.
  8. 8. 7 Sri Lanka Institute of Information Technology References https://www.hg.org/article.asp?id=34024 https://contracts.uslegal.com/contract-by-a-minor/ https://en.wikipedia.org/wiki/Capacity_in_English_law Business Law Sixth Edition M.C. Kuchhal and Vivek Kuchhal A Textbook of Commercial Law (Business Law) Dr. Wickrema Weerasooriya
  9. 9. 8 Sri Lanka Institute of Information Technology Special Thank Lecturer – Mr. Lakshman Premasiri Coordinator – Ms. Chalani Kuruppu

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