Two Cmn Papers Set1

8/3/2019 Two Cmn Papers Set1

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-Research Methodology-Fall-10

SET-1

Q 1. Give examples of specific situations that would call for the following types of

research, explaining why – a) Exploratory research b) Descriptive research c)Diagnostic research d) Evaluation research.

Ans.: Research may be classified crudely according to its major intent or the methods.According to the intent, research may be classified as:

Basic (aka fundamental or pure) research is driven by a scientist's curiosity or interest ina scientific question. The main motivation is to expand man's knowledge, not to create or invent something. There is no obvious commercial value to the discoveries that resultfrom basic research.

For example, basic science investigations probe for answers to questions such as:•

How did the universe begin?• What are protons, neutrons, and electrons composed of?

• How do slime molds reproduce?

• What is the specific genetic code of the fruit fly?

Most scientists believe that a basic, fundamental understanding of all branches of scienceis needed in order for progress to take place. In other words, basic research lays down thefoundation for the applied science that follows. If basic work is done first, then appliedspin-offs often eventually result from this research. As Dr. George Smoot of LBNL says,"People cannot foresee the future well enough to predict what's going to develop from

basic research. If we only did applied research, we would still be making better spears."

Applied research is designed to solve practical problems of the modern world, rather thanto acquire knowledge for knowledge's sake. One might say that the goal of the appliedscientist is to improve the human condition.

For example, applied researchers may investigate ways to:• Improve agricultural crop production

• Treat or cure a specific disease

• Improve the energy efficiency of homes, offices, or modes of transportation

Some scientists feel that the time has come for a shift in emphasis away from purely basicresearch and toward applied science. This trend, they feel, is necessitated by the problemsresulting from global overpopulation, pollution, and the overuse of the earth's naturalresources.



Exploratory research provides insights into and comprehension of an issue or situation.It should draw definitive conclusions only with extreme caution. Exploratory research isa type of research conducted because a problem has not been clearly defined. Exploratoryresearch helps determine the best research design, data collection method and selection of subjects. Given its fundamental nature, exploratory research often concludes that a

perceived problem does not actually exist.Exploratory research often relies on secondary research such as reviewing availableliterature and/or data, or qualitative approaches such as informal discussions withconsumers, employees, management or competitors, and more formal approaches throughin-depth interviews, focus groups, projective methods, case studies or pilot studies. TheInternet allows for research methods that are more interactive in nature: E.g., RSS feedsefficiently supply researchers with up-to-date information; major search engine searchresults may be sent by email to researchers by services such as Google Alerts;comprehensive search results are tracked over lengthy periods of time by services such asGoogle Trends; and Web sites may be created to attract worldwide feedback on anysubject.

The results of exploratory research are not usually useful for decision-making bythemselves, but they can provide significant insight into a given situation. Although theresults of qualitative research can give some indication as to the "why", "how" and"when" something occurs, it cannot tell us "how often" or "how many."Exploratory research is not typically generalizable to the population at large.A defining characteristic of causal research is the random assignment of participants tothe conditions of the experiment; e.g., an Experimental and a Control Condition... Suchassignment results in the groups being comparable at the beginning of the experiment.Any difference between the groups at the end of the experiment is attributable to themanipulated variable. Observational research typically looks for difference among "in-tact" defined groups. A common example compares smokers and non-smokers withregard to health problems. Causal conclusions can't be drawn from such a study becauseof other possible differences between the groups; e.g., smokers may drink more alcoholthan non-smokers. Other unknown differences could exist as well. Hence, we may see arelation between smoking and health but a conclusion that smoking is a cause would not

be warranted in this situation. (Cp) Descriptive research , also known as statistical research, describes data and characteristicsabout the population or phenomenon being studied. Descriptive research answers thequestions who, what, where, when and how.Although the data description is factual, accurate and systematic, the research cannotdescribe what caused a situation. Thus, descriptive research cannot be used to create acausal relationship, where one variable affects another. In other words, descriptiveresearch can be said to have a low requirement for internal validity.The description is used for frequencies, averages and other statistical calculations. Oftenthe best approach, prior to writing descriptive research, is to conduct a surveyinvestigation. Qualitative research often has the aim of description and researchers mayfollow-up with examinations of why the observations exist and what the implications of the findings are.In short descriptive research deals with everything that can be counted and studied. Butthere are always restrictions to that. Your research must have an impact to the life of the



people around you. For example, finding the most frequent disease that affects thechildren of a town. The reader of the research will know what to do to prevent thatdisease thus; more people will live a healthy life.

Diagnostic study : it is similar to descriptive study but with different focus. It is directedtowards discovering what is happening and what can be done about. It aims at identifying

the causes of a problem and the possible solutions for it. It may also be concerned withdiscovering and testing whether certain variables are associated. This type of researchrequires prior knowledge of the problem, its thorough formulation, clear-cut definition of the given population, adequate methods for collecting accurate information, precisemeasurement of variables, statistical analysis and test of significance.

Evaluation Studies : it is a type of applied research. It is made for assessing theeffectiveness of social or economic programmes implemented or for assessing the impactof development of the project area. It is thus directed to assess or appraise the quality andquantity of an activity and its performance and to specify its attributes and conditionsrequired for its success. It is concerned with causal relationships and is more activelyguided by hypothesis. It is concerned also with change over time.

Action research is a reflective process of progressive problem solving led by individualsworking with others in teams or as part of a "community of practice" to improve the waythey address issues and solve problems. Action research can also be undertaken by larger organizations or institutions, assisted or guided by professional researchers, with the aimof improving their strategies, practices, and knowledge of the environments within whichthey practice. As designers and stakeholders, researchers work with others to propose anew course of action to help their community improve its work practices (Center for Collaborative Action Research). Kurt Lewin, then a professor at MIT, first coined theterm “action research” in about 1944, and it appears in his 1946 paper “Action Researchand Minority Problems”. In that paper, he described action research as “a comparativeresearch on the conditions and effects of various forms of social action and researchleading to social action” that uses “a spiral of steps, each of which is composed of a circleof planning, action, and fact-finding about the result of the action”.Action research is an interactive inquiry process that balances problem solving actionsimplemented in a collaborative context with data-driven collaborative analysis or research to understand underlying causes enabling future predictions about personal andorganizational change (Reason & Bradbury, 2001). After six decades of action researchdevelopment, many methodologies have evolved that adjust the balance to focus more onthe actions taken or more on the research that results from the reflective understanding of the actions. This tension exists between

● those that are more driven by the researcher’s agenda to those more driven by participants;

• Those that are motivated primarily by instrumental goal attainment to thosemotivated primarily by the aim of personal, organizational, or societaltransformation; and

• 1st-, to 2nd-, to 3rd-person research, that is, my research on my own action,aimed primarily at personal change; our research on our group (family/team),aimed primarily at improving the group; and ‘scholarly’ research aimed

primarily at theoretical generalization and/or large scale change.



Action research challenges traditional social science, by moving beyond reflectiveknowledge created by outside experts sampling variables to an active moment-to-momenttheorizing, data collecting, and inquiring occurring in the midst of emergent structure.“Knowledge is always gained through action and for action. From this starting point, toquestion the validity of social knowledge is to question, not how to develop a reflective

science about action, but how to develop genuinely well-informed action — how toconduct an action science” (Tolbert 2001).

Q 2.In the context of hypothesis testing, briefly explain the difference between a)Null and alternative hypothesis b) Type 1 and type 2 error c) Two tailed and onetailed test d) Parametric and non-parametric tests.

Ans.: Some basic concepts in the context of testing of hypotheses are explained below -1

1) Null Hypotheses and Alternative Hypotheses : In the context of statisticalanalysis, we often talk about null and alternative hypotheses. If we are tocompare the superiority of method A with that of method B and we proceedon the assumption that both methods are equally good, then this assumption istermed as a null hypothesis. On the other hand, if we think that method A issuperior, then it is known as an alternative hypothesis.

These are symbolically represented as: Null hypothesis = H0 and Alternative hypothesis = HaSuppose we want to test the hypothesis that the population mean is equal to thehypothesized mean (µ H0) = 100. Then we would say that the null hypothesis is that the

population mean is equal to the hypothesized mean 100 and symbolically we can express

it as: H0: µ= µ H0=100If our sample results do not support this null hypothesis, we should conclude thatsomething else is true. What we conclude rejecting the null hypothesis is known as analternative hypothesis. If we accept H0, then we are rejecting Ha and if we reject H0,then we are accepting Ha. For H0: µ= µ H0=100, we may consider three possiblealternative hypotheses as follows:

AlternativeHypotheses

To be read as follows

Ha: µ≠µ H0 (The alternative hypothesis is that the population mean is not equalto 100 i.e., it may be more or less 100)

Ha: µ>µ H0 (The alternative hypothesis is that the population mean is greater than 100)

Ha: µ< µ H0 (The alternative hypothesis is that the population mean is less than100)

The null hypotheses and the alternative hypotheses are chosen before the sample is drawn(the researcher must avoid the error of deriving hypotheses from the data he collects and



testing the hypotheses from the same data). In the choice of null hypothesis, the followingconsiderations are usually kept in view:

1a. The alternative hypothesis is usually the one, which is to be proved, andthe null hypothesis is the one that is to be disproved. Thus a nullhypothesis represents the hypothesis we are trying to reject, while the

alternative hypothesis represents all other possibilities.2 b. If the rejection of a certain hypothesis when it is actually true involvesgreat risk, it is taken as null hypothesis, because then the probability of rejecting it when it is true is α (the level of significance) which is chosenvery small.

3c. The null hypothesis should always be a specific hypothesis i.e., it shouldnot state an approximate value.

Generally, in hypothesis testing, we proceed on the basis of the null hypothesis, keepingthe alternative hypothesis in view. Why so? The answer is that on the assumption that thenull hypothesis is true, one can assign the probabilities to different possible sampleresults, but this cannot be done if we proceed with alternative hypotheses. Hence the use

of null hypotheses (at times also known as statistical hypotheses) is quite frequent.1 2) The Level of Significance: This is a very important concept in thecontext of hypothesis testing. It is always some percentage (usually 5%),which should be chosen with great care, thought and reason. In case wetake the significance level at 5%, then this implies that H0 will be rejectedwhen the sampling result (i.e., observed evidence) has a less than 0.05

probability of occurring if H0 is true. In other words, the 5% level of significance means that the researcher is willing to take as much as 5%risk rejecting the null hypothesis when it (H0) happens to be true. Thus thesignificance level is the maximum value of the probability of rejecting H0when it is true and is usually determined in advance before testing the

hypothesis.2 3) Decision Rule or Test of Hypotheses: Given a hypothesis Ha and analternative hypothesis H0, we make a rule, which is known as a decisionrule, according to which we accept H0 (i.e., reject Ha) or reject H0 (i.e.,accept Ha). For instance, if H0 is that a certain lot is good (there are veryfew defective items in it), against Ha, that the lot is not good (there aremany defective items in it), then we must decide the number of items to betested and the criterion for accepting or rejecting the hypothesis. We mighttest 10 items in the lot and plan our decision saying that if there are noneor only 1 defective item among the 10, we will accept H0; otherwise wewill reject H0 (or accept Ha). This sort of basis is known as a decisionrule.

3 4) Type I & II Errors: In the context of testing of hypotheses, there are basically two types of errors that we can make. We may reject H0 whenH0 is true and we may accept H0 when it is not true. The former is knownas Type I and the latter is known as Type II. In other words, Type I error means rejection of hypotheses, which should have been accepted, andType II error means accepting of hypotheses, which should have been



rejected. Type I error is denoted by α (alpha), also called as level of significance of test; and Type II error is denoted by β(beta).

Decision

Accept H0 Reject H0H0 (true) Correct decision Type I error (α error)Ho (false) Type II error (β

error)Correct decision

The probability of Type I error is usually determined in advance and is understood as thelevel of significance of testing the hypotheses. If type I error is fixed at 5%, it meansthere are about 5 chances in 100 that we will reject H0 when H0 is true. We can controltype I error just by fixing it at a lower level. For instance, if we fix it at 1%, we will saythat the maximum probability of committing type I error would only be 0.01.

But with a fixed sample size n, when we try to reduce type I error, the probability of committing type II error increases. Both types of errors cannot be reducedsimultaneously, since there is a trade-off in business situations. Decision makers decidethe appropriate level of type I error by examining the costs of penalties attached to bothtypes of errors. If type I error involves time and trouble of reworking a batch of chemicals that should have been accepted, whereas type II error means taking a chancethat an entire group of users of this chemicals compound will be poisoned, then in such asituation one should prefer a type I error to a type II error. As a result, one must set a veryhigh level for type I error in one’s testing techniques of a given hypothesis. Hence, intesting of hypotheses, one must make all possible efforts to strike an adequate balance

between Type I & Type II error.1 5) Two Tailed Test & One Tailed Test: In the context of hypothesis testing, these twoterms are quite important and must be clearly understood. A two-tailed test rejects thenull hypothesis if, say, the sample mean is significantly higher or lower than thehypothesized value of the mean of the population. Such a test is inappropriate when wehave H0: µ= µ H0 and Ha: µ≠µ H0 which may µ>µ H0 or µ<µ H0. If significance levelis 5 % and the two-tailed test is to be applied, the probability of the rejection area will be0.05 (equally split on both tails of the curve as 0.025) and that of the acceptance regionwill be 0.95. If we take µ = 100 and if our sample mean deviates significantly from µ, inthat case we shall accept the null hypothesis. But there are situations when only a one-tailed test is considered appropriate. A one-tailed test would be used when we are to test,say, whether the population mean is either lower or higher than some hypothesized value.Parametric statistics is a branch of statistics that assumes data come from a typeof probability distribution and makes inferences about the parameters of thedistribution most well known elementary statistical methods are parametric.Generally speaking parametric methods make more assumptions than non-parametricmethods. If those extra assumptions are correct, parametric methods can produce moreaccurate and precise estimates. They are said to have more statistical power. However, if those assumptions are incorrect, parametric methods can be very misleading. For thatreason they are often not considered robust. On the other hand, parametric formulae are



often simpler to write down and faster to compute. In some, but definitely not all cases,their simplicity makes up for their non-robustness, especially if care is taken to examinediagnostic statistics.Because parametric statistics require a probability distribution, they are not distribution-free.

Non-parametric models differ from parametric models in that the model structure is notspecified a priori but is instead determined from data. The term nonparametric is notmeant to imply that such models completely lack parameters but that the number andnature of the parameters are flexible and not fixed in advance.Kernel density estimation provides better estimates of the density than histograms.

Nonparametric regression and semi parametric regression methods have been developed based on kernels , splines , and wavelets .Data Envelopment Analysis provides efficiency coefficients similar to those obtained

by Multivariate Analysis without any distributional assumption.

Q 3. Explain the difference between a causal relationship and correlation, with an

example of each. What are the possible reasons for a correlation between twovariables?

Ans.: Correlation: The correlation is knowing what the consumer wants, and providingit. Marketing research looks at trends in sales and studies all of the variables, i.e. price,color, availability, and styles, and the best way to give the customer what he or she wants.If you can give the customer what they want, they will buy, and let friends and familyknow where they got it. Making them happy makes the money.

Casual relationship Marketing was first defined as a form of marketing developed from

direct response marketing campaigns, which emphasizes customer retention andsatisfaction, rather than a dominant focus on sales transactions.

As a practice, Relationship Marketing differs from other forms of marketing in that itrecognizes the long term value of customer relationships and extends communication

beyond intrusive advertising and sales promotional messages.

With the growth of the internet and mobile platforms, Relationship Marketing hascontinued to evolve and move forward as technology opens more collaborative and socialcommunication channels. This includes tools for managing relationships with customersthat goes beyond simple demographic and customer service data. Relationship Marketingextends to include Inbound Marketing efforts (a combination of search optimization andStrategic Content), PR, Social Media and Application Development.

Just like Customer relationship management(CRM), Relationship Marketing is a broadlyrecognized, widely-implemented strategy for managing and nurturing a company’sinteractions with clients and sales prospects. It also involves using technology to,organize, synchronize business processes (principally sales and marketing activities) andmost importantly, automate those marketing and communication activities on concrete

http://en.wikipedia.org/wiki/Parametric_statistics


http://en.wikipedia.org/wiki/Kernel_density_estimation


http://en.wikipedia.org/wiki/Nonparametric_regression

http://en.wikipedia.org/wiki/Semiparametric_regression

http://en.wikipedia.org/wiki/Kernel_(statistics)

http://en.wikipedia.org/wiki/Spline_(mathematics)


http://en.wikipedia.org/wiki/Wavelet

http://en.wikipedia.org/wiki/Data_Envelopment_Analysis

http://en.wikipedia.org/wiki/Multivariate_Analysis


http://en.wikipedia.org/wiki/Marketing


http://en.wikipedia.org/wiki/Nonparametric_regression

http://en.wikipedia.org/wiki/Semiparametric_regression

http://en.wikipedia.org/wiki/Kernel_(statistics)


http://en.wikipedia.org/wiki/Wavelet

http://en.wikipedia.org/wiki/Data_Envelopment_Analysis


http://en.wikipedia.org/wiki/Marketing




marketing sequences that could run in autopilot (also known as marketing sequences).The overall goals are to find, attract, and win new clients, nurture and retain those thecompany already has, entice former clients back into the fold, and reduce the costs of marketing and client service. [1] Once simply a label for a category of software tools,today, it generally denotes a company-wide business strategy embracing all client-facing

departments and even beyond. When an implementation is effective, people, processes,and technology work in synergy to increase profitability, and reduce operational costs

Reasons for a correlation between two variables: Chance association, (the relationshipis due to chance) or causative association (one variable causes the other).The information given by a correlation coefficient is not enough to define the dependencestructure between random variables. The correlation coefficient completely defines thedependence structure only in very particular cases, for example when the distribution is amultivariate normal distribution . (See diagram above.) In the case of elliptic distributions

it characterizes the (hyper-)ellipses of equal density, however, it does not completelycharacterize the dependence structure (for example, a multivariate t-distribution's degreesof freedom determine the level of tail dependence).

Distance correlation and Brownian covariance / Brownian correlation [8] [9] wereintroduced to address the deficiency of Pearson's correlation that it can be zero for dependent random variables; zero distance correlation and zero Brownian correlationimply independence.

The correlation ratio is able to detect almost any functional dependency, or the entropy - based mutual information /total correlation which is capable of detecting even more

general dependencies. The latter are sometimes referred to as multi-moment correlationmeasures, in comparison to those that consider only 2nd moment (pairwise or quadratic)dependence.

The polychoric correlation is another correlation applied to ordinal data that aims toestimate the correlation between theorised latent variables.

One way to capture a more complete view of dependence structure is to consider a copula between them.

Q 4. Briefly explain any two factors that affect the choice of a sampling technique.What are the characteristics of a good sample?

Ans.: The difference between non-probability and probability sampling is that non-probability sampling does not involve random selection and probability sampling does.Does that mean that non-probability samples aren't representative of the population? Notnecessarily. But it does mean that non-probability samples cannot depend upon the

http://en.wikipedia.org/wiki/Multivariate_normal_distribution

http://en.wikipedia.org/wiki/Distance_correlation

http://en.wikipedia.org/wiki/Brownian_covariance

http://en.wikipedia.org/wiki/#cite_note-7


http://en.wikipedia.org/wiki/Correlation_ratio

http://en.wikipedia.org/wiki/Information_entropy

http://en.wikipedia.org/wiki/Mutual_information

http://en.wikipedia.org/wiki/Total_correlation

http://en.wikipedia.org/wiki/Polychoric_correlation

http://en.wikipedia.org/wiki/Copula_(statistics)

http://en.wikipedia.org/wiki/Multivariate_normal_distribution

http://en.wikipedia.org/wiki/Distance_correlation

http://en.wikipedia.org/wiki/Brownian_covariance



http://en.wikipedia.org/wiki/Correlation_ratio

http://en.wikipedia.org/wiki/Information_entropy

http://en.wikipedia.org/wiki/Mutual_information

http://en.wikipedia.org/wiki/Total_correlation

http://en.wikipedia.org/wiki/Polychoric_correlation

http://en.wikipedia.org/wiki/Copula_(statistics)



rationale of probability theory. At least with a probabilistic sample, we know the odds or probability that we have represented the population well. We are able to estimateconfidence intervals for the statistic. With non-probability samples, we may or may notrepresent the population well, and it will often be hard for us to know how well we'vedone so. In general, researchers prefer probabilistic or random sampling methods over

non probabilistic ones, and consider them to be more accurate and rigorous. However, inapplied social research there may be circumstances where it is not feasible, practical or theoretically sensible to do random sampling. Here, we consider a wide range of non-

probabilistic alternatives.

We can divide non-probability sampling methods into two broad types: Accidental or purposive .

Most sampling methods are purposive in nature because we usually approach thesampling problem with a specific plan in mind. The most important distinctions amongthese types of sampling methods are the ones between the different types of purposive

sampling approaches. Accidental, Haphazard or Convenience Sampling

One of the most common methods of sampling goes under the various titles listedhere. I would include in this category the traditional "man on the street" (of course, nowit's probably the "person on the street") interviews conducted frequently by televisionnews programs to get a quick (although non representative) reading of public opinion. Iwould also argue that the typical use of college students in much psychological researchis primarily a matter of convenience. (You don't really believe that psychologists usecollege students because they believe they're representative of the population at large, doyou?). In clinical practice, we might use clients who are available to us as our sample. In

many research contexts, we sample simply by asking for volunteers. Clearly, the problemwith all of these types of samples is that we have no evidence that they are representativeof the populations we're interested in generalizing to -- and in many cases we wouldclearly suspect that they are not.

Purposive Sampling In purposive sampling, we sample with a purpose in mind. We usually would

have one or more specific predefined groups we are seeking. For instance, have you ever run into people in a mall or on the street who are carrying a clipboard and who arestopping various people and asking if they could interview them? Most likely they areconducting a purposive sample (and most likely they are engaged in market research).

They might be looking for Caucasian females between 30-40 years old. They size up the people passing by and anyone who looks to be in that category they stop to ask if theywill participate. One of the first things they're likely to do is verify that the respondentdoes in fact meet the criteria for being in the sample. Purposive sampling can be veryuseful for situations where you need to reach a targeted sample quickly and wheresampling for proportionality is not the primary concern. With a purposive sample, youare likely to get the opinions of your target population, but you are also likely tooverweight subgroups in your population that are more readily accessible.



All of the methods that follow can be considered subcategories of purposivesampling methods. We might sample for specific groups or types of people as in modalinstance, expert, or quota sampling. We might sample for diversity as in heterogeneitysampling. Or, we might capitalize on informal social networks to identify specificrespondents who are hard to locate otherwise, as in snowball sampling. In all of these

methods we know what we want -- we are sampling with a purpose.• Modal Instance Sampling

In statistics, the mode is the most frequently occurring value in a distribution. Insampling, when we do a modal instance sample, we are sampling the most frequent case,or the "typical" case. In a lot of informal public opinion polls, for instance, they interviewa "typical" voter. There are a number of problems with this sampling approach. First,how do we know what the "typical" or "modal" case is? We could say that the modalvoter is a person who is of average age, educational level, and income in the population.But, it's not clear that using the averages of these is the fairest (consider the skeweddistribution of income, for instance). And, how do you know that those three variables --

age, education, income -- are the only or even the most relevant for classifying the typicalvoter? What if religion or ethnicity is an important discriminator? Clearly, modal instancesampling is only sensible for informal sampling contexts.

• Expert SamplingExpert sampling involves the assembling of a sample of persons with known or demonstrable experience and expertise in some area. Often, we convene such a sampleunder the auspices of a "panel of experts." There are actually two reasons you might doexpert sampling. First, because it would be the best way to elicit the views of personswho have specific expertise. In this case, expert sampling is essentially just a specific subcase of purposive sampling. But the other reason you might use expert sampling is to

provide evidence for the validity of another sampling approach you've chosen. For instance, let's say you do modal instance sampling and are concerned that the criteria youused for defining the modal instance are subject to criticism. You might convene anexpert panel consisting of persons with acknowledged experience and insight into thatfield or topic and ask them to examine your modal definitions and comment on their appropriateness and validity. The advantage of doing this is that you aren't out on your own trying to defend your decisions -- you have some acknowledged experts to back you.The disadvantage is that even the experts can be, and often are, wrong.

• Quota SamplingIn quota sampling, you select people non-randomly according to some fixed quota. Thereare two types of quota sampling: proportional and non proportional . In proportionalquota sampling you want to represent the major characteristics of the population bysampling a proportional amount of each. For instance, if you know the population has40% women and 60% men, and that you want a total sample size of 100, you willcontinue sampling until you get those percentages and then you will stop. So, if you'vealready got the 40 women for your sample, but not the sixty men, you will continue tosample men but even if legitimate women respondents come along, you will not samplethem because you have already "met your quota." The problem here (as in much



purposive sampling) is that you have to decide the specific characteristics on which youwill base the quota. Will it be by gender, age, education race, religion, etc.?Non-proportional quota sampling is a bit less restrictive. In this method, you specifythe minimum number of sampled units you want in each category. Here, you're notconcerned with having numbers that match the proportions in the population. Instead, you

simply want to have enough to assure that you will be able to talk about even smallgroups in the population. This method is the non-probabilistic analogue of stratifiedrandom sampling in that it is typically used to assure that smaller groups are adequatelyrepresented in your sample.

• Heterogeneity SamplingWe sample for heterogeneity when we want to include all opinions or views, and wearen't concerned about representing these views proportionately. Another term for this issampling for diversity . In many brainstorming or nominal group processes (includingconcept mapping), we would use some form of heterogeneity sampling because our

primary interest is in getting broad spectrum of ideas, not identifying the "average" or

"modal instance" ones. In effect, what we would like to be sampling is not people, butideas. We imagine that there is a universe of all possible ideas relevant to some topic andthat we want to sample this population, not the population of people who have the ideas.Clearly, in order to get all of the ideas, and especially the "outlier" or unusual ones, wehave to include a broad and diverse range of participants. Heterogeneity sampling is, inthis sense, almost the opposite of modal instance sampling.

• Snowball SamplingIn snowball sampling, you begin by identifying someone who meets the criteria for inclusion in your study. You then ask them to recommend others who they may knowwho also meet the criteria. Although this method would hardly lead to representativesamples, there are times when it may be the best method available. Snowball sampling isespecially useful when you are trying to reach populations that are inaccessible or hard tofind. For instance, if you are studying the homeless, you are not likely to be able to findgood lists of homeless people within a specific geographical area. However, if you go tothat area and identify one or two, you may find that they know very well whom the other homeless people in their vicinity are and how you can find them.Characteristics of good Sample: The decision process is a complicated one. Theresearcher has to first identify the limiting factor or factors and must judiciously balancethe conflicting factors. The various criteria governing the choice of the samplingtechnique are:

1 1. Purpose of the Survey : What does the researcher aim at? If he intends togeneralize the findings based on the sample survey to the population, then anappropriate probability sampling method must be selected. The choice of a

particular type of probability sampling depends on the geographical area of the survey and the size and the nature of the population under study.

2 2.Measurability : The application of statistical inference theory requirescomputation of the sampling error from the sample itself. Only probabilitysamples allow such computation. Hence, where the research objective requiresstatistical inference, the sample should be drawn by applying simple random





available facilities and resources. That is, it represents a compromise betweenidealism and feasibility. One should use simple workable methods, instead of unduly elaborate and complicated techniques.

Q 5. Select any topic for research and explain how you will use both secondary andprimary sources to gather the required information.

Ans.: Primary Sources of DataPrimary sources are original sources from which the researcher directly collects data thathas not been previously collected, e.g., collection of data directly by the researcher on

brand awareness, brand preference, and brand loyalty and other aspects of consumer behavior, from a sample of consumers by interviewing them. Primary data is first hand

information collected through various methods such as surveys, experiments andobservation, for the purposes of the project immediately at hand.The advantages of primary data are –

1 It is unique to a particular research study2 It is recent information, unlike published information that is already

available

The disadvantages are – 1 It is expensive to collect, compared to gathering information from

available sources2 Data collection is a time consuming process3

It requires trained interviewers and investigators2 Secondary Sources of DataThese are sources containing data, which has been collected and compiled for another

purpose. Secondary sources may be internal sources, such as annual reports, financialstatements, sales reports, inventory records, minutes of meetings and other informationthat is available within the firm, in the form of a marketing information system. Theymay also be external sources, such as government agencies (e.g. census reports, reports of government departments), published sources (annual reports of currency and finance

published by the Reserve Bank of India, publications of international organizations suchas the UN, World Bank and International Monetary Fund, trade and financial journals,etc.), trade associations (e.g. Chambers of Commerce) and commercial services (outsidesuppliers of information).Methods of Data Collection:The researcher directly collects primary data from its original sources. In this case, theresearcher can collect the required data precisely according to his research needs and hecan collect them when he wants and in the form that he needs it. But the collection of

primary data is costly and time consuming. Yet, for several types of social science



research, required data is not available from secondary sources and it has to be directlygathered from the primary sources.Primary data has to be gathered in cases where the available data is inappropriate,inadequate or obsolete. It includes: socio economic surveys, social anthropologicalstudies of rural communities and tribal communities, sociological studies of social

problems and social institutions, marketing research, leadership studies, opinion polls,attitudinal surveys, radio listening and T.V. viewing surveys, knowledge-awareness practice (KAP) studies, farm management studies, business management studies etc.There are various methods of primary data collection, including surveys, audits and

panels, observation and experiments.1 Survey ResearchA survey is a fact-finding study. It is a method of research involving collection of datadirectly from a population or a sample at a particular time. A survey has certaincharacteristics:1 It is always conducted in a natural setting. It is a field study.2 It seeks responses directly from the respondents.

3 It can cover a very large population.4 It may include an extensive study or an intensive study5 It covers a definite geographical area.

A survey involves the following steps -1 Selection of a problem and its formulation2 Preparation of the research design3 Operation concepts and construction of measuring indexes and scales4 Sampling5 Construction of tools for data collection6 Field work and collection of data

7 Processing of data and tabulation8 Analysis of data9 Reporting

There are four basic survey methods, which include:1 Personal interview2 Telephone interview3 Mail survey and4 Fax surveyPersonal InterviewPersonal interviewing is one of the prominent methods of data collection. It may bedefined as a two-way systematic conversation between an investigator and an informant,initiated for obtaining information relevant to a specific study. It involves not onlyconversation, but also learning from the respondent’s gestures, facial expressions and

pauses, and his environment.Interviewing may be used either as a main method or as a supplementary one in studies of

persons. Interviewing is the only suitable method for gathering information from illiterateor less educated respondents. It is useful for collecting a wide range of data, from factualdemographic data to highly personal and intimate information relating to a person’s



opinions, attitudes, values, beliefs, experiences and future intentions. Interviewing isappropriate when qualitative information is required, or probing is necessary to draw outthe respondent fully. Where the area covered for the survey is compact, or when asufficient number of qualified interviewers are available, personal interview is feasible.Interview is often superior to other data-gathering methods. People are usually more

willing to talk than to write. Once rapport is established, even confidential informationmay be obtained. It permits probing into the context and reasons for answers to questions.Interview can add flesh to statistical information. It enables the investigator to grasp the

behavioral context of the data furnished by the respondents. It permits the investigator toseek clarifications and brings to the forefront those questions, which for some reason or the other the respondents do not want to answer. Interviewing as a method of datacollection has certain characteristics. They are:

1. The participants – the interviewer and the respondent – arestrangers; hence, the investigator has to get himself/herself introduced to the respondent in an appropriate manner.

2. The relationship between the participants is a transitory one. It has

a fixed beginning and termination points. The interview proper is afleeting, momentary experience for them.3. The interview is not a mere casual conversational exchange, but a

conversation with a specific purpose, viz., obtaining informationrelevant to a study.

4. The interview is a mode of obtaining verbal answers to questions put verbally.

5. The interaction between the interviewer and the respondent neednot necessarily be on a face-to-face basis, because the interviewcan also be conducted over the telephone.

6. Although the interview is usually a conversation between two persons, it need not be limited to a single respondent. It can also beconducted with a group of persons, such as family members, or agroup of children, or a group of customers, depending on therequirements of the study.

7. The interview is an interactive process. The interaction betweenthe interviewer and the respondent depends upon how they

perceive each other.8. The respondent reacts to the interviewer’s appearance, behavior,

gestures, facial expression and intonation, his perception of thethrust of the questions and his own personal needs. As far as

possible, the interviewer should try to be closer to the social-economic level of the respondents.

9. The investigator records information furnished by the respondentin the interview. This poses a problem of seeing that recordingdoes not interfere with the tempo of conversation.

10. Interviewing is not a standardized process like that of a chemicaltechnician; it is rather a flexible, psychological process.



3 Telephone Interviewing Telephone interviewing is a non-personal method of datacollection. It may be used as a major method or as a supplementary method. It will beuseful in the following situations:

11. When the universe is composed of those persons whose names arelisted in telephone directories, e.g. business houses, business

executives, doctors and other professionals.12. When the study requires responses to five or six simple questions,e.g. a radio or television program survey.

13. When the survey must be conducted in a very short period of time, provided the units of study are listed in the telephone directory.

14. When the subject is interesting or important to respondents, e.g. asurvey relating to trade conducted by a trade association or achamber of commerce, a survey relating to a profession conducted

by the concerned professional association.15. When the respondents are widely scattered and when there are

many call backs to make.

4 Group Interviews A group interview may be defined as a method of collecting primary data in which a number of individuals with a common interest interact with eachother. In a personal interview, the flow of information is multi dimensional. The groupmay consist of about six to eight individuals with a common interest. The interviewer acts as the discussion leader. Free discussion is encouraged on some aspect of the subjectunder study. The discussion leader stimulates the group members to interact with eachother. The desired information may be obtained through self-administered questionnaireor interview, with the discussion serving as a guide to ensure consideration of the areas of concern. In particular, the interviewers look for evidence of common elements of attitudes, beliefs, intentions and opinions among individuals in the group. At the sametime, he must be aware that a single comment by a member can provide importantinsight. Samples for group interviews can be obtained through schools, clubs and other organized groups.5 Mail Survey The mail survey is another method of collecting primary data. Thismethod involves sending questionnaires to the respondents with a request to completethem and return them by post. This can be used in the case of educated respondents only.The mail questionnaires should be simple so that the respondents can easily understandthe questions and answer them. It should preferably contain mostly closed-ended andmultiple choice questions, so that it could be completed within a few minutes. Thedistinctive feature of the mail survey is that the questionnaire is self-administered by therespondents themselves and the responses are recorded by them and not by theinvestigator, as in the case of personal interview method. It does not involve face-to-faceconversation between the investigator and the respondent. Communication is carried outonly in writing and this requires more cooperation from the respondents than verbalcommunication. The researcher should prepare a mailing list of the selected respondents,

by collecting the addresses from the telephone directory of the association or organizationto which they belong. The following procedures should be followed - a covering letter should accompany a copy of the questionnaire. It must explain to the respondent the

purpose of the study and the importance of his cooperation to the success of the project.Anonymity must be assured. The sponsor’s identity may be revealed. However,



when such information may bias the result, it is not desirable to reveal it. In this case, adisguised organization name may be used. A self-addressed stamped envelope should

be enclosed in the covering letter.1 After a few days from the date of mailing the questionnaires to the respondents, the researcher can expect the return of completed ones from them. The progress in return

may be watched and at the appropriate stage, follow-up efforts can be made.

The response rate in mail surveys is generally very low in developing countries likeIndia. Certain techniques have to be adopted to increase the response rate. They are:

1 1. Quality printing: The questionnaire may be neatly printed on quality lightcolored paper, so as to attract the attention of the respondent.

2 2. Covering letter: The covering letter should be couched in a pleasant style, so asto attract and hold the interest of the respondent. It must anticipate objections andanswer them briefly. It is desirable to address the respondent by name.

3 3. Advance information: Advance information can be provided to potentialrespondents by a telephone call, or advance notice in the newsletter of the

concerned organization, or by a letter. Such preliminary contact with potentialrespondents is more successful than follow-up efforts.4 4. Incentives: Money, stamps for collection and other incentives are also used to

induce respondents to complete and return the mail questionnaire.5 5. Follow-up-contacts: In the case of respondents belonging to an organization,

they may be approached through someone in that organization known as theresearcher.

6 6. Larger sample size: A larger sample may be drawn than the estimated samplesize. For example, if the required sample size is 1000, a sample of 1500 may bedrawn. This may help the researcher to secure an effective sample size closer tothe required size.

78Q 6. Case Study: You are engaged to carry out a market survey on behalf of aleading Newspaper that is keen to increase its circulation in Bangalore City,in order to ascertain reader habits and interests. Develop a title for the study;define the research problem and the objectives or questions to be answeredby the study.

Ans.: Title: Newspaper reading choices

Research problem: A research problem is the situation that causes the researcher to feelapprehensive, confused and ill at ease. It is the demarcation of a problem area within acertain context involving the WHO or WHAT, the WHERE, the WHEN and the WHY of the problem situation.

There are many problem situations that may give rise to research. Three sources usuallycontribute to problem identification. Own experience or the experience of others may bea source of problem supply. A second source could be scientific literature. You mayread about certain findings and notice that a certain field was not covered. This could



lead to a research problem. Theories could be a third source. Shortcomings in theoriescould be researched.

Research can thus be aimed at clarifying or substantiating an existing theory, at clarifyingcontradictory findings, at correcting a faulty methodology, at correcting the inadequate or

unsuitable use of statistical techniques, at reconciling conflicting opinions, or at solvingexisting practical problems

Types of questions to be asked :For more than 35 years, the news about newspapers andyoung readers has been mostly bad for the newspaper industry. Long before anycompetition from cable television or Nintendo, American newspaper publishers wereworrying about declining readership among the young.

As early as 1960, at least 20 years prior to Music Television (MTV) or the Internet,media research scholars1 began to focus their studies on young adult readers' decreasinginterest in newspaper content. The concern over a declining youth market preceded and

perhaps foreshadowed today's fretting over market penetration. Even where circulationhas grown or stayed stable, there is rising concern over penetration, defined as the percentage of occupied households in a geographic market that are served by anewspaper.2 Simply put, population growth is occurring more rapidly than newspaper readership in most communities.

This study looks at trends in newspaper readership among the 18-to-34 age group andexamines some of the choices young adults make when reading newspapers.

One of the underlying concerns behind the decline in youth newspaper reading is thequestion of how young people view the newspaper. A number of studies explored how

young readers evaluate and use newspaper content.

Comparing reader content preferences over a 10-year period, Gerald Stone and TimothyBoudreau found differences between readers ages 18-34 and those 35-plus.16 Younger readers showed increased interest in national news, weather, sports, and classifiedadvertisements over the decade between 1984 and 1994, while older readers rankedweather, editorials, and food advertisements higher. Interest in international news andletters to the editor was less among younger readers, while older readers showed lessinterest in reports of births, obituaries, and marriages.

David Atkin explored the influence of telecommunication technology on newspaper

readership among students in undergraduate media courses.17 He reported that computer-related technologies, including electronic mail and computer networks, were unrelated tonewspaper readership. The study found that newspaper subscribers preferred printformats over electronic. In a study of younger, school-age children, Brian Brooks andJames Kropp found that electronic newspapers could persuade children to become newsconsumers, but that young readers would choose an electronic newspaper over a printedone.18



In an exploration of leisure reading among college students, Leo Jeffres and Atkinassessed dimensions of interest in newspapers, magazines, and books,19 exploring theinfluence of media use, non-media leisure, and academic major on newspaper content

preferences. The study discovered that overall newspaper readership was positivelyrelated to students' focus on entertainment, job / travel information, and public affairs.

However, the students' preference for reading as a leisure-time activity was related onlyto a public affairs focus. Content preferences for newspapers and other print media wererelated. The researchers found no significant differences in readership among variousacademic majors, or by gender, though there was a slight correlation between age and the

public affairs readership index, with older readers more interested in news about publicaffairs.

Methodology

Sample

Participants in this study (N=267) were students enrolled in 100- and 200-level Englishcourses at a midwestern public university. Courses that comprise the framework for thissample were selected because they could fulfill basic studies requirements for all majors.A basic studies course is one that is listed within the core curriculum required for allstudents. The researcher obtained permission from seven professors to distributequestionnaires in the eight classes during regularly scheduled class periods. The students'

participation was voluntary; two students declined. The goal of this sampling procedurewas to reach a cross-section of students representing various fields of study. In all, 53majors were represented.

Of the 267 students who participated in the study, 65 (24.3 percent) were male and 177

(66.3 percent) were female. A total of 25 participants chose not to divulge their genders.Ages ranged from 17 to 56, with a mean age of 23.6 years. This mean does not includethe 32 respondents who declined to give their ages. A total of 157 participants (58.8

percent) said they were of the Caucasian race, 59 (22.1 percent) African American, 10(3.8 percent) Asian, five (1.9 percent) African/Native American, two (.8 percent)Hispanic, two (.8 percent) Native American, and one (.4 percent) Arabic. Most (214) of the students were enrolled full time, whereas a few (28) were part-time students. Theclass rank breakdown was: freshmen, 45 (16.9 percent); sophomores, 15 (5.6 percent);

juniors, 33 (12.4 percent); seniors, 133 (49.8 percent); and graduate students, 16 (6 percent).

Procedure

After two pre-tests and revisions, questionnaires were distributed and collected by theinvestigator. In each of the eight classes, the researcher introduced herself to the studentsas a journalism professor who was conducting a study on students' use of newspapers andother media. Each questionnaire included a cover letter with the researcher's name,address, and phone number. The researcher provided pencils and was available to answer questions if anyone needed further assistance. The average time spent on the



questionnaires was 20 minutes, with some individual students taking as long as an hour.Approximately six students asked to take the questionnaires home to finish. Theyreturned the questionnaires to the researcher's mailbox within a couple of day.



-Legal Aspects of Business-Fall-10

SET-1

Question - 1 : Explain the characteristics of law and briefly describe the sources of

Indian Law.

Answer - 1 :

The term ‘law’ is used in many senses : you may speak of the law of physics, mathematics,

science, or the laws of the football or health. In its widest sense, ‘law’ means any rule of

conduct, standard or pattern, to which actions are required to conform; if not conformed,

sanctions are imposed. When we speak of the law of a State, we use the term ‘law’ in a

special and strict sense.

Characteristics of law :

1. Law is a body of rules : These rules prescribe the conduct, standard or pattern to

which actions of the persons in the state are required to conform. However, all rules

of conduct do not become law in the strict sense. We resort to various kinds of rules

to guide our lives. For example , our conduct may be guided by a rule such as “do

not be arrogant” or “do not be disrespectful to elders or women”. These are ethicalor moral rules by which our daily lives are guided. If we do not follow them, we

may lose our friends and their respect, but no legal action can be taken against us.

2. Law is for the guidance or conduct of persons – both human and artificial :

The law is not made just for the sake of making it. The rules embodied in the law

are made, so as to ensure that actions of the persons in the society conform to some

predetermined standard or pattern. This is necessary so as to ensure continuance of

the society. No doubt, if citizens are ‘self-enlightened’ or ‘self-controlled’, disputesmay be minimized, but will not be eliminated. Rules are, therefore, drawn up to

ensure that members of the society may live and work together in an orderly

manner. Therefore, if the rules embodied in the law are broken, compulsion is used

to enforce obedience, and certain consequences ensue.



3. Law is imposed : Law is imposed on the members to bring about an order in the

group, enabling it to continue and prosper. It is not something which may or may

not be obeyed at the sweet will of the members of society. If you cannot impose a

rule it is better not to have it. Thus, law is made obligatory on the members of the

society.

4. Law is enforced by the executive : Obviously, unless a law is enforced it ceases to

be a law and those persons subject to it will regard it as dead. For example , if A

steals B’s bicycle, he may be prosecuted by a court and may be punished. Also, the

court may order the restitution of the bicycle to its rightful owner i.e., B. If the

government passes many laws but does not attempt to enforce them, the citizens

lose their respect for government and law, and society is greatly weakened. The

force used is known as sanction which the state administers to secure obedience to

its laws.

5. The state : A state is a territorial division, with people therein subject to a uniform

system of law administered by some authority of the state. Thus, law presupposes a

state.

6. Content of law : The law is a living thing and changes throughout the course of

history. Law responds to public opinion and changes according. Law can never be

static. Therefore, amendments are made in different laws from time to time. For

example , the Monopolistic and Restrictive Trade Practices Act, 1969, has been

subjected to many amendments since its inception in 1969.

7. Two basic ideas involved in law : The two basic ideas involved in any law are : (i)

to maintain some form of social order in a group and (ii) to compel members of the

group to be within that order. These basic ideas underlie formulation of any rules

for the members of a group. A group is created because first, there is a social

instinct in the people to live together and secondly, it helps them in self-

preservation. Rules are made by the members of the group, so that the group

doesn’t whither away.



8. Law is made to serve some purpose which may be social, economic or

political : Some examples of ‘law’ in the widest sense of the term. ‘Law’ in its

widest sense may include : (i) Moral rules or etiquettes, the non-observance of

which may lead to public ridicule, (ii) Law of the Land the non-observance of

which may lead to arrest, imprisonment, fines, etc., (iii) Rules of international law,

the non-observance of which may lead to social boycott, trade-sanctions, cold war,

hot war, proxy war, etc.

Sources of Indian Law :

The main sources of modern Indian Law, as administered by Indian courts, may be

divided into two broad categories : (i) Primary sources and, (ii) Secondary sources.

i) Primary sources of Indian Law :

The primary sources of Indian Law are : (a) customs, (b) judicial precedents (stare

decisis), (c) statutes and (d) personal law.

a) Customary Law :

Customs have played an important role in making the law and therefore is also

known as customary law. ‘Customary Law’, in the words of Keeton, may be

defined as “those rules of human action, established by usage and regarded as

legally binding by those to whom the rules are applicable, which are adopted by

the courts and applied as sources of law because they are generally followed by

the political society as a whole or by some part of it”. In simple words, “it is the

uniformity of conduct of all persons under like circumstances”. It is a generally

observed course of conduct by people on a particular matter. When a particular

course of conduct is followed again and again, it becomes a custom.

b) Judicial precedents are an important source of law :

Judicial precedents are another important source of law. It is based on the

principle that a rule of law which has been settled by a series of decisions

generally should be binding on the court and should be followed in similar



cases. These rules of law are known as judicial precedents. However, only such

decisions which lay down some new rules or principles are treated as judicial

precedents. Thus, were there is a settled rule of law, it is the duty of the judges

to follow the same; they cannot substitute their opinions for the established rule

of law. This is known as the doctrine of ‘stare decisis’ . The literal meaning of

this phrase is “stand by the decision”.

c) ‘Statute’ – an important source of law :

The statutes or the statutory law or the legislation is the main source of law.

This law is created by legislation such as Parliament. In India, the Constitution

empowers the Parliament and state legislatures to promulgate law for the

guidance or conduct of persons to whom the statute is, expressly or by

implication, made applicable. It is sometimes called ‘enacted law’ as it is

brought into existence by getting Acts passed by the legislative body. It is called

Statute Law because it is the writ of the state and is in written form (jus

scriptum) .

d) Personal law :

Many times, a point of issue between the parties to a dispute is not covered byany statute or custom. In such cases, the courts are required to apply the

personal law of the parties. Thus in certain matters, we follow the personal laws

of Hindus, Mohammedan and Christians.

ii) Secondary sources of Indian law :

The secondary sources of Indian Law are English Law and Justice, Equity and

Good Conscience.

English law :

The chief sources of English Law are : (i) The Common Law (ii) Equity, (iii) The

law Merchant and (iv) The Statute Law.



Nowadays, English law is not very important source of Indian law. The English

law, in its application to India, has to conform to the peculiar circumstances and

conditions prevailing in this country. Even though the bulk of our law is based on

and follows the English law, yet in its application our courts have to be selective. It

is only when the courts do not find a provision on a particular problem in the

primary sources of Indian Law that it my look to subsidiary sources such as the

English Law. For example , the greater part of the Law Merchant has been codified

in India. The Indian Contract Act, 1872, the Indian Partnership Act, 1932, the Scale

of Goods Act 1930 and the Negotiable Instruments Act, 1882, are some of the very

important Acts relating to business transactions. Where, however, there is some

doubt as to the interpretation of any provisions of these Acts or where certain

branches of the Law Merchant have not been codified, the courts in India look toEnglish decisions on the point, for guidance.

Justice, equity and good conscience :

In India, we do not have, no did we ever had separate courts (as in England)

administering ‘equity’. But the equitable principles of law, i.e., justice, equity and

good conscience, are the guiding force behind most of the statutes in our country

and the decisions of the courts. Especially, where law is silent on any point or thereis some lacuna n a statute, the principles of equity come handy to the judges who

exercise their discretion often on equitable considerations. The frequent use of

terms such as ‘good faith’, ‘public interest’, ‘public policy’, in statutes and by the

judges in their judgements is based on principles of equity.

Now we shall briefly describe the main sources of English law :

1. Common law : This source consists of all those unwritten legal doctrines

embodying customs and traditions developed over centuries by the English

courts. Thus, the common law is found in the collected cases of the various

courts of law and is sometimes known as ‘case law’.





1. To conduct the business of agency according to the principal’s directions

(Sec. 211) : The duty of the agent must be literally complied with, i.e., the agent is

not supposed to deviate from the directions of the principal even for the principal’s

benefit. If he does so, any loss occasioned thereby shall have to be borne by the agent,

whereas any surplus must be accounted for to the principal.

2. The agent should conduct the business with the skill and diligence that is

generally possessed by persons engaged in similar business, except where the

principal knows that the agent is wanting in skill (Sec. 212).

3. To render proper accounts (Sec. 213) : The agent has to render proper accounts.

If the agent fails to keep proper accounts of the principal’s business, everything

consistent with the proved facts will be presumed against him. Rendering of accounts

does not mean showing the accounts, but maintaining proper accounts supported by

vouchers.

4. To communicate with the principal in case of difficulty (Sec. 214) : It is the

duty of agent, in case of difficulty, to use all reasonable diligence, in communicating

with his principal and in seeking to obtain his instructions. In case of emergency,

however, the agent can do all that a reasonable man would, under similar

circumstances, do with regard to his own business. He becomes agent by necessity.

5. Not to make any secret profits : Agent should deliver to the principal all moneys

including secret commission received by him. He can, however, deduct his lawful

expenses and remuneration.

6. Not to deal on his own account : Agent should not deal on his own account

without first obtaining the consent of his principal. If he does so, the principal can

claim from the agent any benefit which he might have obtained.

Example : Pawan directs Amar, his agent, to buy a particular house for him. Amar tells Pawan that it cannot be bought, but buys the house for himself. Pawan may, on

discovering that Amar has bought the house, compel him to sell it to Pawan at the

prince he bought.



7. Not entitled to remuneration for misconduct (Sec. 220) : Agent who is guilty

of misconduct in the business of agency is not entitled to any remuneration in respect

of that part of the business which he has misconducted.

8. Not to disclose confidential information supplied to him by the principal.9. To take all reasonable steps for the protection and preservation of the

interests entrusted to him when the principal dies or becomes of unsound mind

(Sec. 209).

Rights of agent :

Agent has a number of rights these are :

1. Right to remuneration (Secs. 219-220) : Agent is entitled to his agreed

commission or remuneration and if there is no agreement, to a reasonable

remuneration. But the remuneration does not become payable unless he has carried

out the object of agency, except where there is a contract to the contrary. When the

object of agency is deemed to have been carried out or the act assigned to the agent is

completed would depend on the terms of the contract.

Example : Pawar appoints Amar, a broker. Amar is entitled to his commission when

he has procured a party who is willing to negotiate on reasonable terms and to

desirous of entering into a contract with Pawar.

2. Right of retainer (Sec. 217) : Agent may retain, out of any sums received on

account of the principal in the business of the agency, all moneys due to himself in

respect of advances made or expenses properly incurred by him in conducting such

business and also such remuneration as may be payable to him for acting as agent.

This is known as agent’s right of retainer.

3. Right of lien (Sec. 221) : In the absence of any contract to the contrary, agent is

entitled to retain goods, papers and other property, whether movable or immovable of

the principle received by him, until the amount due to himself for commission,

disbursements and services in respect of the same has been paid or accounted for to

him. This lien of the agent is a particular lien confined to all claims arising in respect

of the particular goods and property. By a special contract, however, agent may get a



general lien extending to all claims arising out of the agency. Since, the word ‘lien’

means retaining possession, it can be enjoyed by the agent only where the goods or

papers are in actual or constructive possession of the agent. The right of lien will,

therefore, be lost where he parts with the possession of goods or papers. But if the

possession is obtained from the agent by fraud or unlawful means, his lien is not

affected by the loss of possession.

4. Right of stoppage in transit : The agent can stop the goods while in transit in

two cases : (a) Where he has purchased goods on behalf of the principal either with

his own funds, or by incurring a personal liability for the price, he stands towards the

principal in the position of an unpaid seller. Like an unpaid seller, he enjoys the right

of stopping the goods in transit if in the meantime the principal has become insolvent.

(b) Where agent holds himself liable to his principal for the price of the goods sold,

For example, del credere agent, he may exercise the unpaid seller’s right of stopping

the goods in transit in case of buyer’s insolvency.

5. Right of indemnification (Sec. 222-224) : The principal is bound to indemnify

agent against the consequences of all lawful acts done by the agent in exercise of

authority conferred on him.

Question - 3 : a. What is a contract of indemnity ? Explain.

b. Mention the features of different kinds of guarantee.

Answer - 3 :

Contract of indemnity :

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 promise).

Example : A contracts to indemnify B against the consequences of any proceeding whichC may take against B in respect of a certain sum of Rs. 200. This is a contract of

indemnity.

b. Mention the features of different kinds of guarantee.

Kind of Guarantee :

Oral or written guarantee :

A contract of guarantee may either be oral or in writing (Sec. 126), though a creditor

should always prefer to put it in writing to avoid any dispute regarding the terms, etc. In

case of an oral agreement the existence of the agreement itself is very difficult to prove.

Specific and continuing guarantee :

From the point of view of the scope of guarantee a contract of guarantee may either by

specific or continuing. A guarantee is a “specific guarantee”, if it is intended to be

applicable to a particular debt and thus comes to end on its repayment. A specific

guarantee once given is irrevocable.

Example : A guarantees the repayment of a loan of Rs. 10,000 to B by C (a banker). The

guarantee in this case is a specific guarantee.

A guarantee which extends to a series of transactions is called a “continuing guarantee”

(Sec. 129).

Example : A guarantees payment to B, a tea-dealer, to the amount of Rs. 10,000 for any

tea he may from time to time supply to C. B supplies C with tea of the value above Rs.10,000 and C pays B for it. Afterwards B supplies C with tea to the value of Rs. 15,000.

C fails to pay. The guarantee given by A was a continuing guarantee and he is

accordingly liable to B to the extent of Rs. 10,000.



A guarantee regarding the conduct of another person is a continuing guarantee. Unlike a

specific guarantee which is irrevocable, a continuing guarantee can be revoked regarding

further transactions (Sec. 130). However, continuing guarantee cannot be revoked

regarding transactions that have ready taken place.

The death of the surety operates, in the absence of any contract to the contrary, as a

revocation of a continuing guarantee, so far as regards future transactions. (Sec. 131).

A guarantee may either be for the whole debt or a part of the debt :

Difficult questions arise in case of guarantee for a limited amount because there is an

important distinction between a guarantee for only a part of the whole debt and a

guarantee for the whole debt subject to a limit.

For instance , where X owes Y Rs. 50,000 and A has stood as surety for Rs. 30,000, the

question may arise whether A has guaranteed Rs. 30,000 out of Rs. 50,000 or whether he

has guaranteed the full amount of Rs. 50,000 subject to a limit of Rs. 30,000. This matter

becomes important if X is adjudged insolvent and Y wants to prove in X’s insolvency

and also enforce his remedy against A. If a stood surety only for a part of the debt and if

X’s estate can pay only 25 paisa dividend in the rupee, then Y can get

Rs. 30,000 the full amount of guarantee from A and Rs. 5,000 from X’s estate, being ¼

of the balance, i.e., Rs. 50,000 – Rs. 30,000 = Rs. 20,000 which was not guaranteed.Since after paying Rs. 30,000 to Y, A can claim from X’s estate, he will get Rs. 7,500

being ¼ of Rs. 30,000 paid by A to Y. If on the other hand, A had stood surety for the

whole debt of Rs. 50,000 subject to a limit of Rs. 30,000 then Y can recover from A Rs.

30,000 and from X’s estate Rs. 12,500, i.e., ¼ of Rs. 50,000. A will not get any dividend

unless Y has been fully paid. This can happen only if X’s estate declares a higher

dividend.

Question – 4 : Divya, Vidya and Rajendra want to start a partnership firm dealing with

designer jewelery. Explain to them the different elements in a Partnership deed and

other aspect of a partnership firm.

Answer – 4 :



Partnership Deed :

A partnership can be formed either by oral or written agreement :

In France and Italy, the law requires all partnership agreements to be in writing. But in

England, USA and India, written agreement is not compulsory. But in order to avoidmisunderstanding and litigation, it is desirable to enter into a written agreement which is

called Partnership deed or agreement. The partnership deed is required to be stamped

according to the provisions of the Stamp Act, 1899. Each partner should possess a copy

of the Deed.

Partnership agreements and contract law :

Sec. 3 provides that the unrepealed provisions of the Indian Contract Act, 1872 save

insofar as they are inconsistent with the provisions of this Act, shall continue to apply tofirms. Also Sec. 2(e) provides that “expressions used but not defined in this Act and

defined in the Indian Contract Act, 1872, shall have the meanings assigned to them in

that Act”. As a partnership agreement is a contract, the provisions of the Indian Contract

Act, 1872, are applicable to it.

Partnership Firms :

Application for registration :

Sec. 58 lays down the procedure for registration of partnership firms. A partnership firmmay be registered at any time by post, or delivering to the Registrar of Firms of the area

in which any place of business of the firm is situated or proposed to be situated, a

statement in the prescribed form and accompanied by the prescribed fee, stating : (i) the

firm’s name, (ii) the place or the principal place of business of the firm, (iii) the names of

any other places where the firm carries on business, (iv) the date when each partner

joined the firm, (v) the names in full and addresses of the partners and (vi) the duration of

the firm. The statement must be signed by all the partners, or by their agents especially

authorized in that behalf and duly verified. When the Registrar of Firms is satisfied that

the provisions of Sec. 58 have been duly complied with, he registers the firm by

recording an entry of the statement in a register called the Register of Firms and shall file

the statement (Sec. 59). He then issues under his hand a Certificate of registration.



Registration is effective from the date when the Registrar files the statement and makes

entries in the Register of Firms.

Registration of firms is optional :

The Act does not provide for compulsory registration of firms. It is optional and there isno penalty for non-registration. But at the same time Sec. 69 has effectively, ensured

registration of firms by introducing certain disabilities that an unregistered firm suffers

from. The firm cannot.

Question – 5 : a. Explain the rights of unpaid seller.

b. What are the remedies available for breach of contract ?

Answer – 5 :

Unpaid Seller and his Rights :

A contract is comprised of reciprocal promises. In a contract of sale, if seller is under an

obligation to deliver goods, buyer has to pay for it. In case buyer fails or refuses to pay,

the seller, as unpaid seller, shall have certain rights.

Who is an unpaid seller ?

A seller of goods is an unpaid seller when (i) the whole of the price has not been paid or tendered. (ii) a bill of exchange or other negotiable instrument has been received as

conditional payment and the condition on which it was received has not been fulfilled by

reason of the dishonor of the instrument or otherwise.

Rights of an unpaid seller :

The rights of an unpaid seller may broadly be classified under two heads, namely : (i)

Rights under the Secs. 73-74 of the Indian Contract Act, 1872, i.e., to recover damages

for breach of contract. (ii) Rights under the Sale of Goods Act, 1930 : (a) rights against

the goods; (b) rights against the buyer personally. The rights against the goods are as

follows :

Lien on goods (Secs. 47-49) :



The word lien means to retain possession of. An unpaid seller who is in possession of

goods is entitled to retain them in his possession until payment or tender of the price in

three situations, namely, (a) where the goods have been sold without any stipulation as to

credit; (b) where the goods have been sold on credit, but the term of credit has expired;

(c) where the buyer becomes insolvent. Lien can be exercised only for non-payment of

the price and not for any other charges due against the buyer. For Example , the seller

cannot claim lien for godown charges for storing the goods in exercise of his lien for the

price.

Right of stoppage in transit :

This right of the unpaid seller consists in preventing the goods from being delivered to

the buyer and resuming and regaining their possession while in transit, retaining them till

the price is paid. The right of stoppage in transit is earned only where the right of lien is

lost and is available only where the buyer has become insolvent (Sec. 50).

Right of resale (Sec. 54) :

The unpaid seller, who has retained the possession of the goods in exercise of his right of

lien or who has resumed possession from the carrier upon insolvency of the buyer, can

resell the goods, (i) if the goods are of a perishable nature, without any notice to the

buyer and (ii) in other cases after notice to buyer calling upon him to pay or tender the price within a reasonable time and upon failure of the buyer to do so.

b. What are the remedies available for breach of contract ?

Remedies for Breach of a Contract :

In addition to the rights of a seller against goods provided in Secs. 47 to 54, the seller has

the following remedies against the buyer personally, (i) suit for price (Sec. 55); (ii)

damages for non-acceptance of goods (Sec. 56); (iii) suit for interest (Sec. 56).

Suit for price (Sec. 55) :

Where under a contract of sale the property in the goods has passed to the buyer and the

buyer wrongfully neglects or refuses to pay the price, the seller can sue the buyer for the



price of the goods. Where the property in goods has not passed to the buyer, as a rule, the

seller cannot file a suit for the price; his only remedy is to claim damages.

Example : A sold certain goods to B for Rs. 5,000 and the price was agreed to be paid

before the expiry of ten days of the contract. B fails to pay the price within the stipulatedtime. A can file a suit for price against B even though the goods have not been delivered

or the property in goods has not been passed to B.

Suit for damages for non-acceptance (Sec. 56) :

Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller

may sue him for damages for non-acceptance. Where the property in the goods has not

passed to the buyer and the price was not payable without passing of property, the seller

can only sue for damages and not for the price. The amount of damages is to bedetermined in accordance with the provisions laid down in Sec. 73 of the Indian Contract

Act, 1872. Thus, where there is an available market for the goods prima facie, the

difference between the market price and the contract price can be recovered.

Suit for interest (Sec. 61) :

When under a contract of sale, the seller tenders the goods to the buyer and the buyer

wrongfully refuses or neglects to accept and pay the price, the seller has a further right to

claim interest on the amount of the price. In the absence of a contract to the contrary, the

court may award interest at such rate as it thinks fit on the amount of the price. The

interest may be calculated from the date of the tender of the goods or from the date on

which the price was payable. It is obvious that the unpaid seller can claim interest only

when he can recover the price, i.e., if the seller’s remedy is to claim damages only, then

he cannot claim interest.

Buyer’s remedies against seller :

The buyer has the following rights against the seller for breach of contract : (i) damages

for non-delivery (Sec. 57); (ii) right of recovery of the price; (iii) specific performance

(Sec. 58); (iv) suit for breach of condition; (v) suit for breach of warranty (Sec. 59); (vi)

anticipatory breach (Sec. 60); (vii) recovery of interest (Sec. 61).



Question – 6 : a. Discuss the essentials of a valid contract.

b. What is consideration ? Give some examples.

Answer – 6 :

Essentials of a Valid Contract :

Contract :

A contract is an agreement, enforceable by law, made between at least two parties by

which rights are acquired by one and obligations are created on the part of another. If the

party, which had agreed to do something, fails to do that, then the other party has a

remedy.

Example : D Airlines sells a ticket on 1 January to X for the journey from Mumbai toBangalore on 10 January. The Airlines is under an obligation to take X from Mumbai to

Bangalore on 10 January. In case the Airlines fails to fulfill its promise, X has a remedy

against it.

Thus, X has a right against the Airlines to be taken from Mumbai to Bangalore on 10

January. A corresponding duty is imposed on the Airlines. As there is a breach of

promise by the promisor (the Airlines), the other party to the contract (i.e., X) has a legal

remedy.

Agreement :

Sec. 2(e) defines an agreement as “every promise and every set of promises forming

consideration for each other”. In this context, the word ‘promise’ is defined by Sec. 2(b).

In a contract there are at least two parties. One of them makes a proposal (or an offer) to

the other, to do something, with a view to obtaining the assent of that other to such act.

When the person to whom the proposal is made signifies his assent thereto, the proposal

is said to be accepted. A proposal, when accepted becomes a promise [Sec. 2(b)].

Enforceability by law : The agreement must be such which is enforceable by law so as

to become a contract. Thus, there are certain agreements which do not become contracts

as this element of enforceability by law is absent.

Essentials of a contract :



Sec. 10 provides that all agreements are contracts, if they are made by free consent of

parties, competent to contract, for a lawful consideration, and with a lawful object, and

are not expressly declared by law to be void. To constitute a contract, there must be an

agreement between two or more than two parties. No one can enter into a contract with

himself. An agreement is composed of two elements – offer or proposal by one party and

acceptance thereof by the other party.

Effect of absence of one or more essential elements of a valid contract : If one or more

essentials of a valid contract are missing, then the contract may be either voidable, void,

illegal or unenforceable.

b. What is consideration ? Give some examples.

Consideration [Secs. 2(d), 23-25 and 185]

One of the essential elements of a valid contract is that it must be supported by

consideration.

In simple terms consideration is what a promisor demands as the price for his promise.

The term consideration is used in the sense of quid pro que , i.e., “something in return”.

This something or consideration need not be in terms of money. This “something” may

even be some benefit, right, interest or profit accruing to one party, or some forbearance,detriment, loss or responsibility given, suffered or undertaken by the other party. Also a

promise by one party may be consideration for the promise of other party.

“No consideration, no contract” (Secs. 10 and 25) :

A promise without consideration cannot create a legal obligation. A person who makes a

promise to do or abstain from doing something usually does so as a return of equivalent

of some loss, damage, or inconvenience that may have or may have been occasioned to

the other party in respect of the promise.

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Two Cmn Papers Set1