Commercial and Mercantile Law (Partnership, Sale of Goods, Negotiable Instruments, Companies)
Commercial and Mercantile Law tests business relationships and instruments. The core statutes are the Indian Partnership Act 1932, Sale of Goods Act 1930, Negotiable Instruments Act 1881 and Companies Act 2013.
Partnership
Section 4 defines partnership as a relation between persons who agree to share profits of a business carried on by all or any acting for all. Essential elements are agreement, business, profit-sharing and mutual agency. Registration is optional, but non-registration restricts suits under s 69. A partner’s authority and liability are tested through ss 18–19 and 25.
Sale of goods
Distinguish sale from agreement to sell. Conditions are essential to the main purpose; warranties are collateral. Caveat emptor applies subject to exceptions. The unpaid seller has rights of lien, stoppage in transit and resale under ss 45–54.
Negotiable instruments
A cheque is a bill of exchange drawn on a banker payable on demand. Section 138 applies to dishonour for insufficiency of funds or exceeding arrangement. Notice must be given within 30 days of receipt of information; complaint within one month of the cause of action.
Companies
Incorporation creates a separate legal entity. The corporate veil may be lifted for fraud or tax evasion. Oppression and mismanagement relief lies under ss 241–242.
Worked example
A cheque is dishonoured. The payee must send a demand notice within 30 days of receiving the bank memo and file the complaint within one month after the notice period expires. Failure to do so defeats s 138.
Traps
Do not call a partnership a separate legal entity. Do not apply s 138 to non-cheque instruments. Do not confuse sale with hire-purchase. Do not ignore the notice and limitation timelines.