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 Cs 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 to marry at all throughout his life. Eg : R promises to pay Rs 10,000 to S if does not marry T. This is not void.

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Agreement is restraint of trade is void. An agreement by which any one is restrained 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 the buyer 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 convent preventing the employee from working elsewhere during the contract period. 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.

5. Agreements in restrain of Legal Proceedings- An agreement that purports to restrict any party from enforcing his right there under, by the usual legal proceedings in the ordinary courts or Tribunals, or which limits the time within which he may thus enforce his rights, or which extinguishes the rights of any party on the expiry of a specified period, is void to 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 the amount awarded in the arbitration shall be recoverable, agreement to refer to arbitration any question which has already arisen.

6. Agreements, the meaning of which is not certain, or capable of being made certain . Eg: A agrees to sell B, a hundred tons of oil. There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty. Eg : X agrees to sell to Y, his horse for Rs. 500 or Rs. 1000. The agreement is void for uncertainty as to price.

7. Wagering Agreements A wagering agreement is one by which two persons, holding opposite views with respect to a future uncertain event; agree to give money or moneys worth upon the determination or ascertainment 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-Pakistan cricket match 8. Agreements to do impossible acts are also void. Eg : A promises to pay Rs 2 lacs to B if runs at a speed of 1000 miles per hour Eg : X promises to Pay Rs 10 lacs to Y if he makes his dead father alive

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.

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 , the supplier 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 Bs property.

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.

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, the latter 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 Bs house by mistake. B treats the goods as his own and uses them. B is bound to pay A for the goods.

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 would take care of his own goods.

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 the amount 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.