party because they are not entitled to any protective laws as far as contracts are concerned. An agreement to carry out an illegal act is an example of a void contract or void agreement. For example, a contract between drug dealers and buyers is a void contract simply because the terms of the contract are illegal. In such a case, neither party can go to court to enforce the contract. 9 Agreement in restraint of legal proceedings is void. (Section 28): - An agreement purporting to oust the jurisdiction of the courts is illegal and void on grounds of public policy. Section 28 of the Act renders void two kinds of agreement, namely: 10 Ø An agreement by which a party is restricted absolutely from enforcing his legal rights arising under a contract by the usual legal proceedings in the ordinary tribunals. Ø An agreement which limits the time within which the contract rights may be enforced. However, this is also not an absolute rule and it has two exceptions to it which is as follows: - Ø This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred. 9 10 CONTRACTS 1
19 Ø Nor shall this section render illegal any contract in writing, by which two or more persons agree to arbitration any question between them which has already arisen or affect any provision of any law in force for the time being as to references to arbitration. But right to Appeal does not come within the purview of this section. A party to a suit may agree not to appeal against the decision. § An agreement the terms of which are uncertain is void. (Section 29): - Agreements, the meaning of which is not certain, or capable of being made certain, are void. It is a necessary requirement that an agreement in order to be binding must be sufficiently definite to enable the court to give it a practical meaning. An agreement to agree in the future is void, for there is no certainty whether the parties will be able to agree. 11 Where only a part or a clause of the contract is uncertain, but the rest is capable of bearing a reasonably certain meaning, the contract will be regarded as binding. Similarly, if the agreement is totally silent as to price, it will be valid, for, in that case, Section 9 of the Sale of Goods Act,1930 will apply and reasonable price shall be payable. An agreement contingent upon the happening of an impossible event is void. (Section 36): - A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. 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 to the parties to the agreement at the time when it is made.
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- Winter '17
- Law, restraint of trade, void agreement