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Void Agreements

Following types of agreements are void:

1. Agreements wherein consideration and objects are unlawful

Eg : A agrees to pay Rs 2 lacs to B if he robs C’s house.

2. Agreements without consideration, subject to a few exceptions

Eg : X agrees to give his car to Y but Y does not give anything in return to X

3. Agreements in restraint of marriage.

Eg : P promises to give his house to Q if Q promises never tomarry at all throughout his life.

Eg : R promises to pay Rs 10,000 to S if does not marry T. Thisis not void.

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4. Agreement is restraint of trade is void. An agreement by which any one isrestrained from exercising a lawful profession, trade or business of any kind is to that extent void (S27)

Exceptions

Sale of goodwill – Seller of goodwill of a business may agree with thebuyer to refrain from carrying on a similar business

Partnership agreement – Partners may agree

None of them shall carry on any business other than that of the firm

during the continuance of the firm A retiring partner shall not carry on a similar business within a

specified period or within specified local limits

Service agreements – Service agreements often contain a negative conventpreventing the employee from working elsewhere during the contractperiod. An employee may thus be restrained from taking part in any

business in direct competition with that of his employer. Sole agents – A manufacturer may appoint a agent or distributor for a

specified area and the agent may have to agree not deal with the goods of any other manufacturer.

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5. Agreements in restrain of Legal Proceedings- Anagreement that purports to restrict any party from

enforcing his right there under, by the usual legalproceedings in the ordinary courts or Tribunals, or

which limits the time within which he may thusenforce his rights, or which extinguishes the rights of

any party on the expiry of a specified period, is voidto that extent. This is however , subject to following exceptions:

agreement that any dispute which may arise between the

parties shall be referred to arbitration and that only theamount awarded in the arbitration shall be recoverable,

agreement to refer to arbitration any question which hasalready arisen.

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6. Agreements, the meaning of which is notcertain, or capable of being made certain .

Eg: A agrees to sell B, a hundred tons of oil.

There is nothing whatever to show what kindof oil was intended. The agreement is void foruncertainty.

Eg : X agrees to sell to Y, his horse for Rs. 500or Rs. 1000. The agreement is void foruncertainty as to price.

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7. Wagering Agreements – A wagering agreement is oneby which two persons, holding opposite views with

respect to a future uncertain event; agree to givemoney or money’s worth upon the determination orascertainment of that event. A wagering agreement is

void and cannot be enforced in any court of law.

Eg : X and Y bet upon the result of India-Pakistancricket match

8. Agreements to do impossible acts are also void.

Eg : A promises to pay Rs 2 lacs to B if runs at aspeed of 1000 miles per hour

Eg : X promises to Pay Rs 10 lacs to Y if he makeshis dead father alive

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Quasi-contracts

They are certain relations resembling those

created by contracts.

They do not actually form contracts between the

parties in the legal sense, but only create certain

rights and obligations similar to those created by

contract.

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The following are recognized as quasi contracts.

1. Supply of necessaries-Where necessaries are supplied to

a person, who is incompetent to contract or to

someone whom he is legally bound to support , thesupplier is entitled to recover the price from the

property of the incompetent person.

Eg: A supplies B, a lunatic with necessaries suitable to

his condition in life. A is entitled to be reimbursed from

B’s property.

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2. Payment by interested person-A person who is

interested in the payment of money which another is

bound to pay and who therefore pays it, is entitled to

be reimbursed by the other. Eg: The landlord is bound to pay property tax to the

corporation. If the landlord fails to pay and the tenant

being interested in the payment of tax, pays it, he is

entitled to be reimbursed by the landlord.

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4. Liability to pay for non-gratuitous acts-When a person

does something for another person or delivers

something to him, not intending to do so gratuitously

and such other person enjoys the benefit thereof, thelatter is obliged to compensate the former in respect

of , or to restore the thing so done or delivered.

Eg: A, a trader leaves goods at B’s house by mistake.

B treats the goods as his own and uses them. B isbound to pay A for the goods.

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4. Finder of lost goods- A person who finds

goods belonging to another and takes them

into his custody is subject to the same

responsibility as that of a bailee.

Eg: A finds a bag containing valuables which B

has lost. A is bound to take as much care of

the bag as a man of ordinary prudence wouldtake care of his own goods.

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5. Mistake-A person to whom money is paid or anything

delivered by mistake or under coercion, shall be liable

to repay or return it.

Eg: A and B jointly owe Rs 1 lakh to C. A pays theamount to C. Not knowing this, B pays Rs 1 lakh

again to C . C is bound to repay the amount to B.

Eg : X and Y are twins who look alike. P owes Rs

10000 to X. He gives it to Y mistaking him to be X. Y

is bound to return it to X.

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