Void Agreements
LEGAL ASPECTS OF BUSINESS
LESSON 10: VOID AGREEMENTS
Learning Outcomes
After today’s class you should be able to answer the following questions;
• • •
The agreements expressly declared to be void The uncertain agreements The wagering agreements
have not been discussed in the preceding chapter. Illegal agreements are also ‘unlawful agreements’ as they are expressly declared void by the Contract Act. It may be recalled that in the case of illegal agreements, transactions collateral to them are also tainted with illegality and hence void. 1. Agreements in Restraint of Marriage Every individual enjoys the freedom to marry and so according to Section 26 of the Contract Act “every agreement in restraint of the marriage of any person, other than a minor, is void.” The restraint may be general or partial but the agreement is void, and therefore, an agreement agreeing not to marry at all, or a certain person, or a class of persons, or for a fixed period, is void. However, an agreement restraining the marriage of a minor is valid under the Section. It is interesting to note that a promise to marry a particular person does not imply any restraint of marriage, and is, therefore, a valid contract. Illustrations (a) Agrees with B for good consideration that he will not marry C. It is a void agreement. (b) A agrees with B that she will marry him only. It is a valid contract of marriage. 2. Agreements in Restraint of Trade The Constitution of India guarantees the freedom of trade and commerce to every citizen and therefore Section27 declares “every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void,” Thus no person is at liberty to deprive himself of the fruit of his labour, skill or talent, by any contracts that he enters into. It is to be noted that whether restraint is reasonable or not, if it is in the nature of restraint of trade, the agreement is void always, subject to certain
LESSON 10: VOID AGREEMENTS
Learning Outcomes
After today’s class you should be able to answer the following questions;
• • •
The agreements expressly declared to be void The uncertain agreements The wagering agreements
have not been discussed in the preceding chapter. Illegal agreements are also ‘unlawful agreements’ as they are expressly declared void by the Contract Act. It may be recalled that in the case of illegal agreements, transactions collateral to them are also tainted with illegality and hence void. 1. Agreements in Restraint of Marriage Every individual enjoys the freedom to marry and so according to Section 26 of the Contract Act “every agreement in restraint of the marriage of any person, other than a minor, is void.” The restraint may be general or partial but the agreement is void, and therefore, an agreement agreeing not to marry at all, or a certain person, or a class of persons, or for a fixed period, is void. However, an agreement restraining the marriage of a minor is valid under the Section. It is interesting to note that a promise to marry a particular person does not imply any restraint of marriage, and is, therefore, a valid contract. Illustrations (a) Agrees with B for good consideration that he will not marry C. It is a void agreement. (b) A agrees with B that she will marry him only. It is a valid contract of marriage. 2. Agreements in Restraint of Trade The Constitution of India guarantees the freedom of trade and commerce to every citizen and therefore Section27 declares “every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void,” Thus no person is at liberty to deprive himself of the fruit of his labour, skill or talent, by any contracts that he enters into. It is to be noted that whether restraint is reasonable or not, if it is in the nature of restraint of trade, the agreement is void always, subject to certain
References: • • • • • Kapoor, N.D. (2003), “Elements of Mercantile Law,” Sultan Chand and Sons, New Delhi. http://www.indialawinfo.com/bareacts/soga.html M.C. Kucchal ( 2002), “ Business Law”, Vikas Publishing House Pvt. Ltd, Delhi. P.C. Tulsian (2002), “ Business Law”, Tata Mc. Graw Hill Pvt. Ltd, Delhi. Rohini Aggarwal(2003), “Student’s Guide To Mercantile And Commercial Laws,” Tata Mc. Graw Hill Pvt. Ltd, Delhi Notes 60 © Copy Right: Rai University 11.555