Q.1. Distinguish between fraud and misrepresentation A. Meaning of fraud (Secs.

17 and 19) Fraud means and includes any of the following acts committed by a party to a contract with an intent to deceive the other party thereto or to induce him to enter into a contract: (I) the suggestion as a fact of that which is not true by one who does not believe it to be true; (ii) active concealment of a fact by one having knowledge or belief of the fact; (iii) promise made without any intention of performing it; (iv) any other act fitted to deceive; (v) any such act or omission as the law specifically declares to be fraudulent Meaning of misrepresentation (Secs. 18-19) Misrepresentation is also known as simple misrepresentation whereas fraud is known as fraudulent misrepresentation. Like fraud, misrepresentation is an incorrect or false statement but the falsity or inaccuracy is not due to any desire to deceive or defraud the other party. Such a statement is made innocently. The party making it believes it to be true. In this way, fraud is different from misrepresentation. Fraud is a crime punishable by the law because it is an intentional wrong committed by the party. In misrepresentation there are no such consequences, generally speaking. If a fraud is to proven, then each of the following parameters need to be proven in a court of law: 1. The physical proof presented by the defendant 2. The proof thus presented is incorrect 3. The defendant purposely made false representations (was aware of the falsehood) 4. The false proofs were made with the intention of duping the plaintiff 5. The defendant succeeded in duping the plaintiff 6. The plaintiff suffered loses due to the fraud If you are a plaintiff involved in committing a misrepresentation then you must prove the following parameters: 1. Validity of the evidence presented by the plaintiff 2. The claims were with regard to some legal agreement between the defending and the pleading party 3. False representation of facts at the time of entering into the agreement 4. The plaintiff was induced into entering the agreement by the defendant 5. The agreement resulted in loss for the plaintiff 6. This loss was a gain for the defendant Although it may not be possible for the plaintiff to prove the defendant as a fraudster, it is still possible for the former to validate his situation as that of a misrepresentation. DIFFERENCE BETWEEN FRAUD AND MISREPRESENTATION:The main difference in fraud and misrepresentation are, 1) In misrepresentation the person making the false statement believes it to be true. In fraud the false statement is person who knows that it is false or he does not care to know whether it is true or false. 2) There is no intention to deceive the other party when there is misrepresentation of fact. The very purpose of the fraud is to deceive the other party to the contract. 3) Misrepresentation renders the contract voidable at the option of the party whose consent was obtained by misrepresentation. In the case of fraud the contract is voidable It also gives rise to an independent action in tort for damages. 4) Misrepresentation is not an offence under Indian penal code and hence not punishable. Fraud, in certain cases is a punishable offence under Indian penal code. 5) Generally, silence is not fraud except where there is a duty to speak or the relations between parties is fiduciary. Under no circumstances can silence be considered as misrepresentation. 6) The party complaining of misrepresentation cant avoid the contract if he had the means to discover the truth with ordinary diligence. But in the case of fraud, the party making a false statement cannot say that the other party had the means to discover the truth with ordinary diligence.

Q.2. What are the remedies for breach of contract? A. When someone breaches a contract, the other party is no longer obligated to keep its end of the bargain. From there, that party may proceed in several ways: (i) the other party may urge the breaching party to reconsider the breach; (ii) if it is a contract with a merchant, the other party may get help from consumers associations; (iii) the other party may bring the breaching party to an agency for alternative dispute resolution; (iv) the other party may sue for damages; or (v) the other party may sue for other remedies. Rescission of the contract: When a breach of contract is committed by one party, the other party may treat the contract as rescinded. In such a case the aggrieved party is freed from all his obligations under the contract. Damages (Sec.75): Another relief or remedy available to the promisee in the event of a breach of promise by the promisor is to claim damages or loss arising to him there from. Damages under Sec.75 are awarded according to certain rules as laid down in Secs.73-74. Sec.73 contains three :at rules: (i) Compensation as general damages will be awarded only for those losses that directly and naturally result from the breach of the contract (ii) Compensation for losses indirectly caused by breach may be paid as special damages if the party in breach had knowledge that such losses would also follow from such act of breach. (iii) The aggrieved party is required to take reasonable steps to keep his losses to the minimum. What is the most common remedy for breach of contracts: The usual remedy for breach of contracts is suit for damages. The main kinds of damages awarded in a contract suit are ordinary damages. This is the amount of money it would take to put the aggrieved party in as good a position as if there had not been a breach of contract. The idea is to compensate the aggrieved party for the loss he has suffered as a result of breach of the contract.

Q.3. Distinguish between indemnity and guarantee. A. Meaning of indemnity: Indemnity means to make good the loss or to compensate the party who has suffered some loss. Secs.124 and 125 provide for a contract of indemnity. Sec.124 provides that a contract of indemnity is a contract whereby one party promises to save the other from loss caused to him (the promisee) by the conduct of the promisor himself or by the conduct of any other person. A contract of insurance is a glaring example of such type of contracts. A contract of indemnity may arise either by (i) An express promise or (ii) operation of law, e.g., the duty of a principal to indemnify an agent from consequences of all lawful acts done by him as an agent. The contract of indemnity, like any other contract, must have all the essentials of a valid contract. These are two parties in a contraction of identity indemnifier and indemnified. The indemnifier promises to make good the loss of the indemnified (i.e., the promisee). Example: A contracts to indemnify B against the consequences of any preceding which C may take against B in respect of a certain sum of Rs 200. This is a contract of indemnity. Contract of Indemnity: A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person. Meaning of guarantee: Guarantee means to perform the promise or discharge the liability of a third person in case of his default. The contracts of guarantee are among the most common business contracts and are used for a number of purposes. These are: i) The guarantee is generally made use of to secure loans. Thus, a contract of guarantee is for the security of the creditor. ii) The contracts of guarantee are sometimes called performance bonds. For example, in the case of a construction project, the builder may have to find a surety to stand behind his promise to perform the construction contract. Also employers often demand a type of performance bond known as a fidelity bond from employees who handle cash, etc., for the good conduct of the latter. If an employee misappropriates then the surety will have to reimburse the employer. iii) Bail bonds, used in criminal law, are a form of contract of guarantee. A bail bond is a device which ensures, that a criminal defendant will appear for trial. In this way a prisoner is

released on bail pending his trial. If the prisoner does not appear in the court as desired then the bond is forfeited. Definition and nature of the contract of guarantee (Sec.126): Contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default. 3contract of guarantee is defined as a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called surety; the person for whom the guarantee is given is called the principal debtor, and the person to whom the guarantee is given is called the creditor. A contract of guarantee may be either oral or in writing. From the above discussion, it is clear that in a contract of guarantee there must, in effect, be two contracts, a principal contract between the principal debtor and creditor, and a secondary contract between the creditor and the surety. In a contract of guarantee there are three parties, viz., the creditor, the principal debtor and the surety. Therefore, there is an implied contract also between the principal debtor and the surety. Indemnity Comprise only two parties- the indemnifier and the indemnity holder. Liability of the indemnifier is primary Guarantee There are three parties namely the surety, principal debtor and the creditor The liability of the surety is secondary. The surety is liable only if the principal debtor makes a default. The primary liability being that of the principal debtor. The surety give guarantee only at the request of the principal debtor. There is an existing debt or duty, the performance of which is guarantee by the surety.

The indemnifier need not necessarily act at the request of the indemnified. The possibility of any loss happening is the only contingency against which the indemnifier undertakes to indemnify.

Q.4. What is the distinction between cheque and bill of exchange. A. Bill of exchange: A bill of exchange is defined by Sec.5 as an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the order of, a certain person, or to the bearer of the instrument. Specimen of a bill of exchange Rs 10, 000 New Delhi110 016 Jan. 13, 2006 Six months after date pay to A or order/bearer the sum of ten thousand rupees only for value received. To X SD/-Y Address _________________________________ Stamp _________________________________ Here Y is the drawer, A is the payee and X is the drawee. X will express his willingness to pay accepting the bill by writing words somewhat as below moss the face of the bill: ACEPTE D

Sd-X Jan. 16, 2006. The specimen given above is of a usance bill, payable after a specified period of time. A bill of exchange may be drawn payable at sight, i.e., on demand or payable after certain time after sight also. Parties to a bill of exchange The parties of bill of exchange are: The drawer: The person to whom the amount of the bill is payable. The drawee: The person on whom the bill is drawn. Thus, drawee is the person responsible for acceptance and payment of the bill. In certain cases however a stranger may accept the bill on behalf of the drawee. The payee: The person to whom amount of the bill is payable. It may be the drawer himself or any other person. The holder: It is the original payee but where the bill has been endorsed, the endorsee. In case of a bearer bill, the bearer or possessor is the holder. The endorser: It is the person who endorses a bill. The endorsee: It is the person to whom the bill is negotiated by endorsement. Drawee in case of need. Acceptor for honor. Cheques. Acheque is the usual method of withdrawing money from a current account th a banker. Savings bank accounts are also permitted to be operated by cheques provided certain minimum balance is maintained. A cheque in essence, is an order by the customer of the bank directing his banker to pay on demand, the specified amount, to or to the order of the person named therein or to the bearer. Sec.6 defines a cheque. The Amendment Act 2002 has substituted new section for Sec.6. It provides that a cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic from. A cheque in the electronic form means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature and asymmetric crypto system. 8.5.1 Specimen of a cheque ABC BANK
PAYABLE AT PAR AT ALL BRANCHES OF ABC BANK Weekly Holiday On Sunday Date:..

PAY __________________________________________________________________OR BEARER RUPEES____________________________________________________

___________________________________________________________________
A/c No. 4402320000197
ABC PLUS

Rs.

ABC BANK LTD. CC-31, Commercial Complex,Naraina lnd Area Phase-1,New Delhi-110020, New Delhi Authorized Signatories

Every bank has its own printed cheque forms which are supplied to the account holders at the time of opening the account as well as subsequently whenever needed. These forms are printed on special security paper which is sensitive to chemicals and makes any chemical alterations noticeable. Although,

legally, a customer may withdraw his money even by writing his directions to the banker on a plain paper but in practice bankers honor only those orders which are issued on the printed forms of cheques. Cheque It is drawn on a banker It is seldom drawn in sets It does not require acceptance by the drawee. Days of grace are not allowed to a banker to the drawee. No stamp duty is payable on checks It is usually drawn on the printed . Q.5. Distinguish between companies limited by shares and companies limited by guarantee. A. A company limited by guarantee is normally incorporated for non-profit making functions. The company has no share capital. A company limited by guarantee has members rather than shareholders. The members of the company guarantee/undertake to contribute a predetermined sum to the liabilities of the company which becomes due in the event of the company being wound up. The Memorandum normally includes a non-profit distribution clause and these companies are usually formed by clubs, professional, trade or research associations. The main difference between a company limited by guarantee and a company limited by shares is that the company has no share capital. A Company limited by guarantee is a lesser known type of business entity which is generally formed by non-profit purposes and has members instead of shareholders. There are both some similarities and differences between the two groups. Members and shareholders enjoy limited liability, however in cases where a share based company is liquidated; the latter might be required to pay all amounts of unpaid monies relating to the shares they hold. For example, if an individual shareholder holds 100 shares of Rs.100 each, all of which remains unpaid at the time of dissolution, then they would be required to pay Rs.10000 to the company. Most companies limited by guarantee have a constitution which states that each member is only required to pay Rs.100 should it be dissolved. Assuming that an average shareholder holds more than one share in a company, members in a business limited by guarantee do appear to have less risk attached to their positions. PROFIT MAKING STATUS Perhaps the most fundamental difference between the two types of limited companies is that those with shares generally exist for profit making purposes. Companies limited by guarantee however, are nonprofit making organizations and are usually registered to provide a specified service to the public or a particular segment of the population. The memorandum and articles of association of each would also differ as companies limited by shares usually have very general objects clauses which allow them to pursue any legal trade or activity. OBJECTS OF COMPANIES LIMITED BY GUARANTEE Companies limited by guarantee however, often have very specific objects and detailed rules pertaining to which areas they can engage in. Charities, which are often of this type, might have restrictions imposed on them by their major donors who wish to ensure that their donations will be spent according to their wishes and not in a manner which they would not approve REMOVING THE WORD LIMITED Companies limited by guarantee can have the word limited removed from their name under section 30 of the Companies Act. COMPANY DIRECTORS, SECRETARY AND DECLARANT Bill of Exchange It may be drawn on any party or individual Foreign bills are drawn in sets It must be accepted by the drawee before he can be made liable to pay the bill Three days of grace are always allowed Stamp duty has to be paid on bill of exchange It may be drawn in any paper and need not necessarily be printed.

Both types of companies are bound by the same requirements to have at least one director, a secretary and a declarant at the time of incorporation and throughout any period of its existence. When forming a company limited by guarantee, members are listed in the same manner in which shareholders would be, even though no allotments are made to them.

Q.6.What is the definition of cyber crime. A. Computer crime, or cyber crime, refers to any crime that involves a computer and a network. The computer may have been used in the commission of a crime, or it may be the target. Net crime refers, more precisely, to criminal exploitation of the Internet. Issues surrounding this type of crime have become high profile, particularly those surrounding hacking, copyright infringement, child pornography, and child grooming. There are also problems of privacy when confidential information is lost or intercepted, lawfully or otherwise. Cyber crime includes anything from downloading illegal music files to stealing millions of dollars from online bank accounts. Cyber crime also includes non-monetary offences, such as creating and distributing viruses on other computers or posting confidential business information on the Internet. Perhaps the most prominent form of cyber crime is identity theft, in which criminals use the Internet to steal personal information from other users. Two of the most common ways this is done is through phishing and pharming. Both of these methods lure users to fake websites, where they are asked to enter personal information. This includes login information, such as usernames and passwords, phone numbers, addresses, credit card numbers, bank account numbers, and other information criminals can use to "steal" another person's identity. For this reason, it is smart to always check the URL or Web address of a site to make sure it is legitimate before entering your personal information. CYBERCRIME Cybercrime is defined as crimes committed on the internet using the computer as either a tool or a targeted victim. It is very difficult to classify crimes in general into distinct groups as many crimes evolve on a daily basis. Even in the real world, crimes like rape, murder or theft need not necessarily be separate. However, all cybercrimes involve both the computer and the person behind it as victims, it just depends on which of the two is the main target. Hence, the computer will be looked at as either a target or tool for simplicitys sake. For example, hacking involves attacking the computers information and other resources. It is important to take note that overlapping occurs in many cases and it is impossible to have a perfect classification system. Computer as a tool: When the individual is the main target of Cybercrime, the computer can be considered as the tool rather than the target. These crimes generally involve less technical expertise as the damage done manifests itself in the real world. Human weaknesses are generally exploited. The damage dealt is largely psychological and intangible, making legal action against the variants more difficult. These are the crimes which have existed for centuries in the offline. Scams, theft, and the likes have existed even before the development in high-tech equipment. The same criminal has simply been given a tool which increases his potential pool of victims and makes him all the harder to trace and apprehend. Computer as a target: These crimes are committed by a selected group of criminals. Unlike crimes using he computer as a tool, these crimes requires the technical knowledge of the perpetrators. These crimes are relatively new, having been in existence for only as long as computers have - which explains how unprepared society and the world in general is towards combating these crimes. There are numerous crimes of this nature committed daily on the internet. But it is worth knowing that Africans and indeed Nigerians are yet to develop their technical knowledge to accommodate and perpetrate this kind of crime. Cyber crime encompasses any criminal act dealing with computers and networks (called hacking). Additionally, cyber crime also includes traditional crimes conducted through the Internet. For example; hate crimes, telemarketing and Internet fraud, identity theft, and credit card account thefts are considered to be cyber crimes when the illegal activities are committed through the use of a computer and the Internet. Crime committed using a computer and the internet to steal a person's identity or sell contraband or stalk victims or disrupt operations with malevolent programs.