VOID AGREEMENTS

A void agreement is not enforceable by law. It has no legal existence.

Types of Void Agreements1) Agreements made by an incompetent

persons2) Agreements made under mutual mistake

as to a matter of fact essential to the agreement

3) Agreement made under mistake as to a foreign law

4) Agreement, the consideration or object of which is unlawful

5) Agreement made without consideration6) Agreement in restraint of marriage7) Agreement in restraint of trade8) Agreement in restraint of legal

proceedings

9) Agreement, the meaning of which is uncertain

10) Agreement by way of wager 11) Agreement contingent on an uncertain

future event even if the event becomes impossible

12) Agreement contingent on an impossible event

13) Agreement to do an impossible act

6) Agreement in restraint of marriageEvery person has a right to get married and that too has a right to exercise his choice.

7) Agreement in restraint of trade

Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.(sec.27) The object of enacting this section is to encourage free trade.

Exceptions:a) Restraining freedom of action: an agreement to

sell all quantities of particular goods manufactured by the person at a certain price is not in restraint of trade.

b) Limiting competition or trade combinations: There can be agreements between a group of manufactures or traders regulating the conditions of an industry or the price of the product, opening and closing of business etc.

c) Agreements between partners: A partner of a firm may be restrained from carrying on a similar business while he is a partner. [sec.11(27) of the partnership Act]

d) Service agreements: An agreement or contract of service by which an employee binds himself during the term of his agreement not to compete with his employer directly by carrying on similar business, or accepting any other employment during his period of service. Such agreements between employer and employee is not in restraint of trade.

e) Sale of goodwill: A, the owner of a motor bus entered into a contract with B carrying on a similar business as A, plying buses between Pune and Mahabaleshwar. To avoid competition, B purchases the entire business along with its goodwill. It was agreed by A that he would not carry on similar business in the same place for three years. It is a valid contract and not in restraint of trade.

8) Agreements in restraint of legal proceedings:

9) Agreements, the meaning of which is uncertain:Agreements, the meaning of which is not certain, or not capable of being made certain, are void (sec.29).eg. A is willing to sell his house for Rs. 1 lac or Rs. 5 lacs. Here the agreement with A for the purchase of house will be void because price is not certain.

10) Wagering agreements: A wager is an agreement between two parties to the effect that if a given uncertain event happens, one party shall pay a certain sum to the other.

11) Agreement contingent on an uncertain future event if the event becomes impossible: eg. A agrees to sell his horse to B after 6 months. The horse dies after the agreement. The agreement can not be fulfilled as it is impossible after the death of the horse.

12) Agreements contingent on an impossible event:Contingent agreements to do or not to do anything if an impossible event happens, are void, whether the impossibility of the event is known or not known to the parties to the agreement at the time when it is made.(sec.36)eg. A agrees to pay Rs. 1000 to B if two parallel lines meet at any point.

13) Agreement to do impossible act: A agrees with B to discover treasure by magic.