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प्रश्न
Legal Principle: Agreements in restraint of trade are void and unenforceable.
Fact Situation: Manu has been working as a blacksmith in his village for many decades. Somu has been undergoing training with him for the past three years. After his training is over, Somu enters into an agreement with Manu that he will not start a competing business in the same village while Manu is alive.
Which of the following statements is the most appropriate in relation to the legal principle stated above?
पर्याय
This agreement is void and unenforceable since it is a restraint on trade.
This agreement is valid and enforceable since Manu is Somu’s teacher.
This agreement is valid but not enforceable after Manu’s death.
This agreement is valid and enforceable since it is to protect Manu’s interest in consideration for teaching Somu to be a blacksmith.
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उत्तर
This agreement is void and unenforceable since it is a restraint on trade.
Explanation:
Under section 27 of the Indian contract Act, 1872 agreements in restraint of trade are void. It stipulates that an agreement, which restrains anyone from carrying on a lawful profession, trade, or business, is void to that extent. In the given case Manu is restraining Somu to carry on a lawful profession thus the agreement between them is void. Hence option (a) is the most appropriate.
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संबंधित प्रश्न
Principle: Law never enforces an impossible promise.
Facts: 'A‘ made a promise to 'B‘ to discover treasure by magic.
Given below is a statement of legal principle followed by factual situations. Apply the principle to the facts and select the most appropriate answer.
LEGAL PRINCIPLE: An agreement, the meaning of which is not certain, or capable of being made certain, is void.
FACTUAL SITUATION: A and B, who were brothers, entered into an agreement which stated that A would sell his entire share of the ancestral property to B. The agreement did not mention the specific details (like survey number) of the property.
Given below is a statement of legal principle followed by factual situations. Apply the principle to the facts and select the most appropriate answer.
PRINCIPLE Every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, to that extent is void.
FACTUAL SITUATION A company entered into a contract with Coca Cola Ltd. to bottle soft drinks produced by Coca Cola. One of the terms of the contract was that the company would not bottle soft drinks for any other competitor of Coca Cola during the pendency of the contract.
Apply the legal principles to the facts given below and select the most appropriate answer.
Legal Principles:
- Offer is a proposal made by one person to another to do any act or abstain from doing it. The person who makes the offer is known as the promisor or offeror and the person to whom an offer is made is known as the promisee or the offeree.
- A contract comes into being by the acceptance of an offer. When the person to whom the offer is made signifies his consent thereto, the proposal is said to be accepted and the parties are at consensus ad idem regarding the terms of the agreement.
Factual Situation: The plaintiffs offered to provide delivery of a machine tool for a price of ₹75,535. The delivery of the tool was set for 10 months, with the condition that orders only qualified as accepted once the terms in the quotation were met and prevailed over any of the buyer's terms. The buyer responded to the offer with their own terms and conditions, which did not include the 'price variation clause' listed in the seller's terms. This included a response section that required a signature and is returned in order to accept the order. The sellers returned this response slip with a cover letter signaling that delivery would be in accordance with their original quotation. The tool was ready for delivery but the buyers could not accept delivery, for which the sellers increased the price which was in line with their initial terms. This was denied by the buyer and an action was brought by the seller to claim the cost of delay and interest. Was a contract made with or without a price variation clause?
Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.
Principle: When there is a breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party. However, the parties are free to agree as to damages payable in advance in case there is a breach of contract.
Facts: Mr. Ramesh entered into a contract with Mr. Ramakrishna for selling his green Alto Car for Rs. 3 lakhs. Mr. Ramakrishna was to pay Rs. 3 lakhs on or before 25th April 2005 and take possession of the car. The party failing to honour the contract has to pay Rs. 40,000/- as damages to the other party. Mr. Ramakrishna has not performed his part of the contract. Mr. Ramesh is claiming Rs. 40,000/-
LEGAL PRINCIPLES:
1. Once a person accepts another's an offer, and signifies such acceptance to the former, a contract comes into existence between them.
2. Uncertain agreements are void agreements.
3. Rejected offers can be accepted only if renewed.
FACTUAL SITUATION: Bakshi wanted to purchase a particular land. He sent a letter to his cousin. Dutt, offering him ₹4 lakhs for it. Dutt replied that he would not sell it below 5 lakhs. Bakshi communicated his willingness to pay this amount. Dutt did not sell the land to Bakshi. Bakshi sued him for breach of contract.
DECISION:
LEGAL PRINCIPLES: 1. Acceptance must be given only by the person to whom the offer is made. 2. Communication of acceptance to a person who did not make the offer does not bind the offeror.
FACTUAL SITUATION: Pal sold his business to Sam without disclosing it to his customers. Mani, an old customer sent an order for goods to Pal by name. Sam, the new owner, executed the order. Mani refuses to accept the goods from Sam as he intended to deal only with Pal. In a suit by Sam against Mani:
DECISION:
LEGAL PRINCIPLE: A contract that is impossible to perform becomes void.
FACTUAL SITUATION: Surender agreed to deliver a specific quality of rice to Sonakshi identified by both of them. Before delivery, the rice was burnt by a short circuit. Is Surender discharged from the performance of the contract?
DECISION:
Principle: Where one of the parties to a contract was in the position to dominate the decision of the other party, the contract is enforceable only at the option of the party who was in a position to dominate the decision of the other party.
Facts: A doctor asked his patient to make a payment of ₹ 10,00,000/- (Ten Lac Only) for treatment of his fever. The patient paid an amount of ₹5,00,000/- (Five Lac Only) and promised to pay the remaining amount after the treatment. After treatment, the patient recovered from fever. The doctor demanded the remaining amount from the patient. The patient refused to pay.
Principle: When, at the desire of one person, any other person has done or abstained from doing something, such act or abstinence or promise is called a consideration for the promise.
Facts: X, the uncle of Y, made a promise to pay him an amount of ₹1,00,000/- as a reward if Y quits smoking and drinking within one year. Y quit smoking and drinking within six months.
