Void Agreements Under The Contract Act

(b) where the parties are not familiar with such acts: – there may be cases where the parties do not know the reality at the time of the conclusion of the contract, but learn, after a certain period of time, that the performance of such an act is impossible. Soon, the parties will learn of the impossibility of the service, the contract will be at cancellation. These agreements are covered by the provisions of S.20 that deal with errors. In most cases, these agreements relate to the absence of the subject matter of the contract at the time of conclusion of the contract. Consequently, the agreement is vitiated by errors as to the existence of the subject-matter of the contract. The following example will make the point all the clearer. This is mentioned in section 24 of the Act. The gist of this assertion is that if the consideration in whole or in part is illegal or if the final proceeds of the agreement are illegal, the agreement is cancelled. However, the contract would be considered valid after the deletion of the illegal clauses. For example, if there is an agreement between A and B on the exchange of drugs and medicinal herbs for ₹5000, the agreement will not be concluded, although the agreement is legal.

This is due to the fact that the subject of the agreement is illegal. But in this case, if we remove the drugs from the object, then the contract would be qualified as valid. That is what is dealt with in section 27 of the Act. The freedom to engage in any form of trade and profession is a fundamental right guaranteed by the Indian Constitution, in accordance with Article 19, paragraph 1. Therefore, any agreement to restrict trade and profession would be considered inconclusive. The deduction can be both partial and total. This was argued in madhub Chander v. Raj Coomar, where the defendant had offered to pay the applicant a certain amount of money if he agreed to close his activities at a given location. However, when his shop was closed, the applicant was refused payment by the defendant.

The Tribunal decided here that the defendant did not have any money for the applicant, since the agreement was void (since it re-established the trade), although it imposed a partial restriction, i.e. it extends only to a specific place. An important point in this context is to remain in the memories. If one of the parties is aware of the impossibility of the service and signs a contract with the other party, the other party is entitled to compensation for the loss or damage it has suffered. Such an agreement amounts to fraud in accordance with p. 17 of the Act. For example, A knew that the timber for which he entered into a sales agreement to B had already been destroyed by fire, and then his agreement with B is not covered by this section, but by S.17 of the Act. Another good example is example (c) of P.56, in which A marries B, who is already married to C and prohibits polygamy by the law to which he is subject.

A must compensate B for the damage it has suffered as a result of the breach of the promise. This section states that any ambiguous or ambiguous agreement whose meaning cannot be sure is then considered a void agreement. For example, if A makes an agreement with B, in which he says he delivers a certain amount of wheat to his place of business. An example of an agreement that is invalid by uncertainty is a vaguely worded agreement: “X agrees to buy fruit from Y.” If it is not possible to determine what type of fruit was agreed or envisaged, the agreement is not valid. . . .