Void Agreements Under Indian Contract Act 1872: Meanings,Types & legal Implications
SECTION FOR REFERENCE : 26, 27, 28,13 UNDER INDIANN CONTRACT ACT 1872
AGREEMENTS IN RESTRAINT OF MARRIAGE (Sec. 26)
Every agreement in restraint of the marriage of any person void
AGREEMENTS IN RESTRAINT OF TRADE (Sec. 27)
| Agreements in restraint of trade is void | Every agreement by which Anyone is restrained from exercising A lawful profession, trade or business of any kind Is void To that extent |
| Burden of proof | • Party supporting the contract- must show that the restraint is reasonably necessary to protect his interests • Party challenging the contract- must show that the restraint is injurious to the publics |
| Sale of goodwill. | (a)Such restriction must relate to a similar business (b) Such restriction must be within specified local limits (c) Such restriction must be for the time so long as the buyer or any person deriving title so the goodwill from him, cases un a business in the specified local limits (d) Such specified local limits should be reasonable having regard the nature of the business |
| Restriction existing on partner | An agreement by a partner not to carry on any business other than that of the firm is valid |
| Restrictions on outgoing partner | (a) An agreement may provide that an outgoing partner will not partner carry on a similar business after dissolution of the firm (b)Such restriction must be within specified local limits or within a specified period (c)The restriction should be reasonable having regard to the nature of the business |
| Restrictions on partners upon or in anticipation of the dissolution of the firm | (A) An agreement may provide that some or all of the partners will not carry on a similar business firm (B) Such restriction must be within specified local limits or within a specified period (C) The restriction should be reasonable having regard to the nature of the business |
| Restriction in case of sale of goodwill of a firm. | (a) At the time of sale of goodwill of the firm, a partner may agree that he will not carry on a similar business (b) Such restriction must be within specified local limit or within specified period (c)The restriction should be reasonable laving regard to the nature of business |
AGREEMENTS IN RESTRAINT OF LEGAL PROCEEDINGS (Sec. 28)
| Agreement restricting enforcement of rights | An agreement by which Any party is restricted absolutely From enforcing his legal rights under any contract is void |
| Agreement limited period of limitation | An agreement limits the time within which an action may brought is void |
| Exceptions | (a) An agreement is not void merely because it provides that any dispute arising between two or more persons shall be referred to arbitration (b)An agreement is not void merely because it provides thus any dispute that has arisen between two or more persons shall be referred to arbitration |
WAGERING AGREEMENTS (Sec. 13)
| Meaning | An agreement between Two persons under which money or money’s worth is payable by one person to another in the happening or non- happening of a future uncertain event is called a wagering agreement |
| Effects of wagering agreements | (a) The agreement is void (b) The agreement is illegal in the states of Maharashtra and Gujrat. (c) No suit it can be filed to recover the amount of any wager |
| Agreements not held as wager | (a) Agreement to pay money price of money not exceeding Rs 1,000 (b)An agreement to pay a price exceeding Rs 500 in the winner of horse race is not a wager |
