CH -8CH -8AGREEMENTS AGREEMENTS EXPRESSLYEXPRESSLY

DECLARED AS VOIDDECLARED AS VOID

MEANINGMEANING An agreement not enforceable by law is An agreement not enforceable by law is

said to be void. Such agreement has no said to be void. Such agreement has no legal entity and no party of the contract has legal entity and no party of the contract has the right to enforce it by law. the right to enforce it by law.

EXAMPLEEXAMPLE:-An agreement with minor or with :-An agreement with minor or with a person of unsound mind is void ab-a person of unsound mind is void ab-initio.initio.

However there may be some agreements However there may be some agreements which, when made , are enforceable, but which, when made , are enforceable, but later on due to the change in the later on due to the change in the circumstances, the contract become circumstances, the contract become unenforceable. These are also called void unenforceable. These are also called void contracts when they become contracts when they become unenforceable.unenforceable.

Various agreements Various agreements that has been that has been declared voiddeclared void

(1). (1). Agreements made by incompetent Agreements made by incompetent parties:-parties:-

MinorMinor Case:-Mohribibi Vs. Dharmdas GoshCase:-Mohribibi Vs. Dharmdas Gosh(2). (2). Agreements made under mutual mistake of Agreements made under mutual mistake of

facts:-facts:-ExEx:-A agreed to sell his horse to B. At the time of :-A agreed to sell his horse to B. At the time of

agreement, the horse was dead, though neither agreement, the horse was dead, though neither party was aware of this fact.party was aware of this fact.

(3). (3). Agreement with unlawful consideration Agreement with unlawful consideration and objectand object:-:-

Act forbidden by lawAct forbidden by law FraudulentFraudulent Involves injury to the person or property of Involves injury to the person or property of

anotheranother If it is immoralIf it is immoral

(4). (4). Agreement without considerationAgreement without consideration:-:-ExEx:- A promises to give wrist-watch to B on :- A promises to give wrist-watch to B on

his birthday.his birthday.(5). (5). Agreements in restraint of Agreements in restraint of

marriagemarriage:-other than minor is void.:-other than minor is void.ExceptionsExceptions:-:- If Hindu husband promises to his wife that If Hindu husband promises to his wife that

he will not do another marriage until they he will not do another marriage until they are husband and wife, then such promise are husband and wife, then such promise is valid.is valid.

If a employer while appointing a woman If a employer while appointing a woman puts the condition that the woman will puts the condition that the woman will remain unmarried till the time she remains remain unmarried till the time she remains in his employment, this agreement is valid in his employment, this agreement is valid because it is a condition for the because it is a condition for the employment.employment.

(6). (6). Agreements in restraint of Agreements in restraint of trade:-trade:-

i.e. lawful profession, trade, or business i.e. lawful profession, trade, or business of any kind , is to that extent void.of any kind , is to that extent void.

ExceptionsExceptions:-:-(a)(a) Sale of goodwillSale of goodwill(b)(b) Restraint on partnerRestraint on partner(c)(c) In case of seperation from partnershipIn case of seperation from partnership(d)(d) On dissolution of firmOn dissolution of firm(e)(e) On sale of goodwill of the firmOn sale of goodwill of the firm(f)(f) Trade combinationsTrade combinations(g)(g) Agreements of serviceAgreements of service

(7). (7). Agreements in restraint of Agreements in restraint of Legal proceedingsLegal proceedings

(8). (8). Agreements involving Agreements involving uncertaintyuncertainty:-:-

Example:- A agrees to sell 1ooo tonnes Example:- A agrees to sell 1ooo tonnes of oil to B. It this agreement there is of oil to B. It this agreement there is no clarity of what kind of oil will be no clarity of what kind of oil will be sold. The agreement is void.sold. The agreement is void.

((9)9) Agreements by way of Wager or Agreements by way of Wager or Wagering agreementsWagering agreements:-:-

Ex:- bet for rain. Event is Uncertain .So it Ex:- bet for rain. Event is Uncertain .So it is void being an wagering agreement.is void being an wagering agreement.

Features of wagering:-Features of wagering:-

(1)(1) Uncertain eventUncertain event

(2)(2) Equal chances of win or lossEqual chances of win or loss

(3)(3) No control on eventNo control on event

(4)(4) No other motive than cash / goodsNo other motive than cash / goods

(5)(5) Promise to give goods / cashPromise to give goods / cash

Effects of wagering agreement:-Effects of wagering agreement:- is voidis void

Exceptions:-Exceptions:-

Contribution towards prize is not Contribution towards prize is not unlawful and is validunlawful and is valid

Agreements that are also considered Agreements that are also considered equivalent to wagering agreements equivalent to wagering agreements

areare:-:-(A)(A) Commercial transactionsCommercial transactions

(B)(B) LotteryLottery

(C)(C) Cross word competitionCross word competition

(D)(D) Contract for optionsContract for options

(E)(E) Chit fundChit fund

(F)(F) Speculative transactionsSpeculative transactions

(G)(G) Horse-raceHorse-race

(H)(H) Contracts of insuranceContracts of insurance

(10). (10). Agreement to do Agreement to do Impossible ActsImpossible Acts:-:-

Ex:- a enters into an agreement with B Ex:- a enters into an agreement with B to discover a treasure by magic. to discover a treasure by magic. This is a void agreement on the This is a void agreement on the ground of impossibility.ground of impossibility.

Causes of impossibility after Causes of impossibility after entering the contractentering the contract

i.i. Change in lawChange in lawii.ii. Destruction of subject matterDestruction of subject matteriii.iii. Personal incapacity of the promiserPersonal incapacity of the promiser