void contract-c - 4

8/11/2019 Void Contract-c - 4

1/14

1. Agreement in Restraint of Marriage Sec.26

An agreement which restricts a persons freedom tomarry , or to marry any person of his choice is against

public policy and is void.

A promise by a man in favour of a woman that hewould not marry any person other than that woman,

and further promise to pay her a sum of Rs. 50,000 ifhe married somebody else was held to be againstpublic policy.

(Promise to marry a girl is different )


2/14

Void Agreements-cont.2. Agreement in Restraint of Trade Sec.27

Every agreement by which anyone is restrained from

exercising a lawful profession, trade or business of anykind is void to that extent.

Restraining a person from carrying on a trade generallyaims at avoiding competition and has monopolistictendency are discouraged by law.

Eg. A and B carried on the same kind of business in the same locality .B agree to pay some amount to A if A closed the business in thatlocality. A closed the business and then brought the action against B torecover the promised amount. It was held that A was not entitled .


3/14

i) Sale of Good will When there is sale of businessby a person along with its goodwill, the seller of thebusiness may make an agreement with the buyer notto carry on the business in competition with thebuyer.

ii) Restraint on Employment -- An agreement of

service under which an employee agrees that he willserve a particular employer for a certain duration,and that he will not serve anybody else during thatperiod is a valid agreement.


4/14

exceptions- cont.iii) Trade CombinationsSometimes, the traders or

manufacturers combine together to eliminatecompetition as between themselves and make

arrangements fixing minimum price(for goods to besold), regulating the supply of goods and puttingprofits in a common pool and dividing the sameamongst themselves. valid.

iv) Solus agreements

some times the seller ormanufacturer of a certain product may agree tat hewill supply the whole of his product to a particularsingle buyer only or buyer agrees to purchase fromsingle seller only. is valid.


5/14

3. Agreements which restricts absolutely the partiesfrom enforcing their legal rights is void

The agreements which wholly or partially prohibithe parties from having recourse to a court of law. If

for instance a contract were to contain a stipulation

that no action should be brought upon it, that

stipulation would be void.


6/14

Restriction on legal right-- But if the parties agree to a partial restriction on the

right to go to the Court of law , such restriction isenforceable.

i.e if two competent courts can possibly deal with thesubject matter of litigation, it is open to the parties to acontract to agree that dispute in respect thereof should

be adjudicated upon one of the two competent courtsand not by the other.

but agreement cannot confer jurisdiction on a courtwhich does not in fact have jurisdiction.


7/14

Void agreements-4. Agreement which limit the time within which a party

may enforce his contractual rights is void.

According to the Indian Limitation Act there is a time limit for

various actions. If an agreement between the parties stipulates asmaller time limit than prescribed under law , the agreement is

void.

Exceptions

1. Reference of future dispute to arbitration. (but if partiesare not happy about the award of arbitrator they can go tothe court)

2. Reference of existing dispute to arbitration


8/14

5.Agreements which are Uncertain and

Ambiguous Sec. 29

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

There is nothing whatever to show what kind of

oil was intended.void.


9/14

Void agreements--5.Agreements by way of wager: Sec.30

Essentialsi) The parties have opposite views regarding an uncertain

event ii) There are chances of gain or loss to the parties iii) The

parties have no other interest except winning or losing of bet.

Eg.If A agrees to pay B Rs.100 if does not rain on 1stjune and B agrees to

pay A Rs.100 if it rains .ExceptionsHorse-race and Crossword competitions being those are

relating to skill.


10/14

1. Object of the agreement is forbidden by law

eg. An agreement to sell liquor without a licence, when a

licence is required to sell the same, is void.

2. Defeating the provisions of law

Eg. Where the parties , who married , agreed before marriage

that wife would be allowed to live with her parents after the

marriage.


11/14


12/14

Unlawful agreements-cont.6.Against public policy

i) Agreement to stifle prosecution

Eg. If A promises B to drop a prosecution which he

has instituted against B for robbery , and B

promises to restore the value of the things

taken.


13/14

Against public policy--ii) Agreement of Maintenance and champerty

i.e aiding a party in civil proceedings by

providing financial or other assistance without lawfuljustification. When a person intemeddles in thelitigation between others by providing assistance toone of the parties and he has no interest of his own inthe litigation is unlawful.

champertyis receiving a share in the gain made in theproceedings maintained by him.


14/14

Against public policy--iii) Trading agreement with an enemy

When there is a war between two countries , it is

unlawful and against public policy that a personshould trade with a subject of the enemy country.

iv) Marriage brokerage contract

v) Agreement tending to injure the public service

A promises to obtain for B an employment in thepublic service and B promises to pay Rs,50,000 to A .

void contract-c - 4

Documents