Legal Aspects of Infrastructure Business: Slide-1 Date: 06/02/2016

Legal Aspects of Infrastructure Business
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Objectives of the Course
Infrastructure is the foundation on which the edifice of a countrys economic

growth and success is built.
This course is designed to develop an awareness of the legal framework within
which business operates in India, and to give to the participants the basic
understanding (not the detailed knowledge of the provisions of law) of some of
the significant legal aspects of business. In particular, this course aims at
acquainting the participants with the conceptual and operational parameters of
the general principles governing contractual relations; law of property, law of
agency, guarantee, and sale of goods.
The object of this course is also to apprise the participants of the legal issues that
arise in the course of implementation of infrastructure projects in India. The
course does not purport to be an exhaustive course on the laws governing the
various infrastructure sectors. Instead, it is designed to develop (in the
participants) the basic understanding of the legal framework that governs the
development of infrastructure projects through private participation.
This course also aims at acquainting the participants with the fundamental legal
and conceptual parameters of the different forms of business organisations, such
as, conventional Partnership, Limited Liability Partnership, and Company.
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Learning Outcomes
At the end of the programme, the participants should be able to:

Recognise and understand legal issues in business and personal life;
Understand the fundamentals and general perceptive of the legal
framework of contracts;
Appreciate the legal scaffold governing property, agency, guarantee, and
sale of goods;
Apprise the legal issues that arise in the course of implementation of
infrastructure projects in India;
Understand the fundamental legal and conceptual parameters of the
different forms of business organisations, such as, conventional
Partnership, Limited Liability Partnership, and Company;
Recognise and avoid or resolve legal problems in a variety of business
and everyday life situations; and
Function effectively with the lawyers, whether in a personal or
professional capacity.
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Concepts to be studied and dealt with in LAIB
Relationship Between Law and Business

General Principles of Contract Law
Law of Agency
Law of Sale of Goods
Law of Guarantee
Electronic Contracts
Government Contracts
Tendering Procedure
Standard Form Contracts
Law of Property
Forms of Business Organisations
Infrastructure Projects
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(General Principles of Contracts)
General Principles of Contract

Law
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What is Law?
Classification of Law: Public and Private
Private Law: Substantive Law and
Adjective Law
Right: Right in rem and right in
personam
Law of Obligation
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Juristic concept of
constituent elements:
i.
ii.
contract
has
two
Obligation, and
Agreement
Justification for the enforcement of a contract:

i.
ii.
Principle of moral justification

Principle of economic justification (Paton: Credit
depends essentially on ability to rely on the promises
of others and can flourish only when there is a fully
developed law of contract.)
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Functions of a Contract
Fundamentals to business
Creates rights and duties between the parties
Provides stability and predictability
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The Indian Contract Act 1872

o Structure, Extent, and Commencement
Effect of the ICA:
o The Act amends and defines certain parts only and is not
exhaustive;
o The Act is, in general, conclusive on all matters covered by it;
o The Act applies to all contracts entered into after it came into
force, and not before;
o The Act applies to all contracts entered into in India and not those
entered into outside India;
o The Act admits application of the native law of the land in cases
in which the Act is silent; and
o The Act neither has any preponderance over the enactments
made later, nor is superseded by the later enactments.
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Ways by which a contractual relation can be

created:
i. By Agreement and Contract
ii. By Standard Form Contract
iii. By Promissory Estoppel
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Contract
upon satisfaction of S. 10
Agreement
consideration
Promise
when accepted
Proposal
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Essentials of a Contract (S. 10)
1. An agreement [S. 2 (e)];

2. The agreement should be made by the free consent (Ss 13-22);
3. The agreement should be entered into between parties
competent to contract (Ss 11-12);
4. It should be for a lawful consideration [Ss 2 (d), 25];
5. It should be with a lawful object (Ss 23-30); and
6. It should not have been expressly declared to be void.
7. Formalities under different laws: Nothing herein contained shall
affect any law in force in India, and not hereby expressly
repealed, by which any contract is required to be made in
writing or in the presence of witnesses, or any law relating to the
registration of documents.
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Proposal (Offer) [S. 2(a)]:

(When one person signifies to another his willingness to do or to abstain
from doing anything, with a view to obtaining the assent of that other to
such act or abstinence, he is said to make a proposal)
1. Plurality of persons.
2. Communication of the proposal (offer) to the
proposee (offeree).
3. Object of making the proposal.
4. Terms of the proposal should be certain and clear.
5. Intention to create legal relationship.
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Communication of Proposal
How is it made? (S. 3)
When complete (S. 4)
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Kinds of Offer
General Offer and Particular (Specific) Offer
Carlill v Carbolic Smoke Ball Co (1893) 1QB 256.
Acceptance by performing conditions or

receiving consideration (S. 8)
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Implied and Express Promise (S. 9)

Upton Rural District Council v Powell (1942)
1 All ER 220.
Cross Offers
Standing/Open/Continuing Offer
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Offer and Invitation to Treat

An offer is an expression of a willingness (to
contract) on certain terms made with the intention
that a binding agreement will exist once the offer is
accepted. If an individual is not willing to implement
terms, but merely seeking to initiate negotiations,
this is not an offer but an invitation to treat.
Harvey v Facey (1893) AC 552.
Mc Pherson v Appana AIR 1951 SC 184: 1951
SCR 161.
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Catalogues and Display of Goods cases

Expression of Interest (EoI)
A call to potential providers of goods and/or services to register

interest in supplying them. Commonly a document describing
requirements or specifications and seeking information from
potential providers that demonstrate their ability to meet those
requirements.
Expression of Interest (EoI) provides a starting point in the overall
procurement process. Government agencies may publish an
Expression of Interest to attract potential bidders and to short-list
potential bidders. The EoI is an optional early phase in the
tendering process. Prospective tenderers express interest as
described in the advertisement, resulting in the tender documents
being sent to the prospective tenderer.
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Purpose of Expression of Interest:

o Invite prospective consultants or contractors to
make submissions;
o Enable contractors and vendors to state their ability
to meet specific project requirements, either
individually or by combining their abilities;
o Enable contractors and vendors to be assessed for
inclusion or otherwise in a short list for invitation to
submit a consultancy proposal or a tender.
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(General Principles
of Contracts)
Acceptance
Effect of Acceptance
Essentials:
1. Acceptance should be communicated.
2. Acceptance
should
be
absolute
and
unqualified.
3. Acceptance should be made in a prescribed
manner or in some usual and reasonable
manner.
4. Acceptance should be made while the offer is
still subsisting.
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Communication of acceptance
Brogden v Metropolitan Railway Co (1877) 2
App Cas 666 HL.
Communication to the offeror himself

Communication by the acceptor himself
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Legal Aspects of Infrastructure Business: Slide-1 Date: 06/02/2016

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