LEGAL FRAMEWORK OF REAL ESTATE

INTRODUCTION

• What do you mean by Legal? Something permitted by Law

• What do you mean by Law? A set of rules and regulations given by a prescribed authority

• Framework – conceptual structure

• Legal Framework- set of acts and laws that govern the decision making related to that field.

Importance of studying Law

• One can operate business without any hindrances

• If one is not aware then business can be dissolved or forced to be closed down by the government.

Basic Terms…

• What is the difference between:-

• BILL

• LAW

• ACT

• Latest Bills

Laws related to Real Estate

• The Indian Contract Act

• The Transfer of Property Act

• The Minimum Wages Act

• The ESI Act

• The Payment of Wages Act

• The Income Tax Act

1st LAW

THE INDIAN CONTRACT ACT• What is a Contract? A contract is defined as

an agreement enforceable before the Law

• What is an Agreement?

“ Agreement is every promise or set of promises forming consideration for each other”

In simple words,

AGREEMENT=OFFER+ACCEPTANCE

ESSENTIALS OF A VALID CONTRACT

• Offer+ Acceptance

• Intention to create legal relationship

• Consideration

• Capacity of Parties

• Free Consent

• Possibility of Performance

• Unlawful object

• Legal Formalities

• Certainty of meaning

• Not declared to be Void or Illegal

1. Offer , Acceptance

• When a person or a group of persons make a proposal to the other party or when a party signifies to another his willingness to do or to abstain from doing anything, it is called as “Offer”

• Acceptance is giving an assent to the offer.

Essentials of a Valid Offer

• It must be capable of creating legal relations

• It must be certain, definite and not vague

• It must be communicated to the offree

• It must be made with a view to obtaining assent of the other party

• It may be conditional

• Lapse of an offer

• An invitation to offer is not an offer

Essentials of a Valid Acceptance• It must be unconditional

• It must be communicated to the offeror

• It must be made within a reasonable time

• The acceptor must be aware of the offer when it is made

• It cannot be implied from silence

• It must be given before the offer lapses

• It must be according to the prescribed mode or usual or reasonable mode

2. Intention to create a legal relationship• Both the parties entering into the contract

should know it well that when they will sign a contract or enter into a contract there will be a legal relationship created between them.

• Agreements of Social or Domestic nature are not counted as contracts.

3. Consideration

• When a party does something for the other party it must get something in return.

• This “something in return” is called as consideration

• It is also called as quid pro quo

Exceptions to this Rule

• Natural Love and Affection

• Acts done voluntarily

• Gifts

• Donations & Charity

4. Capacity of Parties

• Capacity to contract means competency to enter into a contract.

• According to the law there are three kinds of persons are considered as incompetent to contract

• Minor

• Persons of Unsound Mind

• Persons diqualified by law

Minor

• A Minor is a person who has not completed 18th year of his/her age.

• Agreement with or by a minor is void

• He can always plea his infancy in court