Advertisements
Advertisements
Question
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?
Options
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.
Advertisements
Solution
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.
APPEARS IN
RELATED QUESTIONS
Principle: An agreement without free consent can be enforced only at the option of the party whose consent was not free.
Facts: A obtains the consent of B to enter into an agreement by putting a gun on the head of B‘s girlfriend.
'Pacta Sunt Servanda' means that
No one can be convicted twice for the same offense. This doctrine is called
X, a married woman, agreed to live in adultery with B and also agreed to serve him as his housekeeper. In return, B agreed to pay X ₹500 per month for living in adultery and ₹500 per month for housekeeping. The agreement is
The question consists of legal propositions/principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true. In other words, in answering the following question, you must not rely on any principles except the principle that is given herein below for the question. Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability.
Principle: When an offer is accepted by a person to whom it is made, it becomes a promise. But this promise will become legally binding only when the acceptance of the offer is unconditional.
Facts: Ram makes an offer to sell his house to Shyam for ₹50 lacs. Shyam accepts this offer but wants to pay the price of the house in five quarterly installments. Ram does not agree with it. Thereafter Shyam agrees to pay the price of the house in the way as originally desired by Ram. But Ram does not reply to it. Can Shyam compel Ram to sell his house to him?
The question consists of legal propositions/principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true. In other words, in answering the following question, you must not rely on any principles except the principle that is given hereinbelow for the question. Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability.
Principle: In an agreement, a condition subsequent must be complied with, to claim the benefit of that agreement.
Facts: A agrees to transfer a farm to B, provided that, if B does not go to England within three years after the date of the agreement, his interest in the farm shall cease. B does not go to England within the term prescribed.
Principle: Acceptance should be made while the offer is still subsisting. The offer or is free to retract his offer at any time before his offer gets accepted by the offeree. Once the offer is withdrawn or is lapsed, it is not open to being accepted so as to give rise to a contract. Similarly, if time is prescribed within which the offer is to be accepted, then the offer must be accepted within the prescribed time. And if no time is prescribed, then the acceptance must be made within a reasonable time. 'What is a reasonable time', is a question of fact which is to be determined by taking into account all the relevant facts and surrounding circumstances.
Facts: 'X' makes an offer to 'Y' to sell his equipment for ₹1000.00. No time is specified for acceptance. 'Y' sends his reply two years after receiving the offer.
Which of the following derivations is correct?
Consists of legal proposition(s)/ principle(s) (hereinafter referred to as 'principle') and facts. Such principles may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in study of law, research aptitude, and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option.
Principle: According to the law of trade unions in India, no suit or other legal proceeding shall be maintainable in any civil court against any registered trade union or any officer or member thereof in respect of any act done in contemplation or in furtherance of a trade dispute.
Facts: Soloman, the Secretary of a registered Trade Union took a loan from a bank for the higher education of his daughter. Soon after completing the course, she was married to an NRI Engineer. Solomon did not repay the loan. The Bank demanded the payments from Soloman and warned him that the Bank will take suitable legal action against him. Identify the legal position in this regard.
Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
Legal Principle:
1. The battery is the intentional causation of harmful or offensive contact with another's person without that person's consent.
2. When lawfully exercising the power of arrest or some other statutory power a police officer had greater rights than an ordinary citizen to restrain another.
Factual Situation: Two police officers on duty in a police car observed two women in the street who appeared to be soliciting for the purpose of prostitution. One of the women was known to the police as a prostitute but the other, X, was not a known prostitute. When the police officers requested X to get into the car for questioning she refused to do so and instead walked away from the car. One of the officers, a policewoman, got out of the car and followed X in order to question her regarding her identity and conduct and to caution her, if she was suspected of being a prostitute, in accordance with the approved police procedure for administering cautions for suspicious behaviour before charging a woman with being a prostitute. X refused to speak to the policewoman and walked away, whereupon the policewoman took hold of X's arm to detain her. X then swore at the policewoman and scratched the officer's arm with her fingernails. X was convicted of assaulting a police officer in the execution of her duty. She appealed against the conviction, contending that when the assault occurred the officer was not exercising her power of arrest and was acting beyond the scope of her duty in detaining X by taking hold of her arm. The police contended that the officer was acting in the execution of her duty when the assault occurred because the officer had good cause to detain X for the purpose of questioning her to see whether a caution for suspicious behaviour should be administered. Decide whether the police officer is liable for battery.
Decision:
Apply the legal principles to the facts given below and select the most appropriate answer.
Legal Principles:
1. A contract comes into being from the acceptance of an offer, When the person to whom the offer is made signifies his assent thereto, the proposal is said to be accepted and the parties are at consensus and idem regarding the terms of the agreement.
2. Consideration is something that moves from the promise to the promisor, at the implied or express request of the latter, in return for his promise. The item that moves can be a right. interest, profit, loss, responsibility given or suffered, forbearance, or a benefit which is of some value in the eyes of law.
3. Contractual rights and liabilities are exclusive to the parties to contract.
4. There are few exceptions to the doctrine of privity of contracts like agency, trust, assignment, and third party beneficiary.
5. A quasi-contract is a contract that is created by the court when no such official contract exists between the parties to prevent a party from being unjustly enriched, or from benefitting from the situation when he/she does not deserve to do so.
Facts: Tanu’s brother, Ishan, tries to talk her into building a greenhouse in her large back-yard. She declines, but lshan is convinced that, if she were surprised by a lovely greenhouse, she would love it. Knowing that Tanu makes good money, and could easily afford the greenhouse, Ishan contacts greenhouse builder Aditya and arranges to have him erect the structure while his sister is at work one day.
Tanu is not happy with her brother’s initiative, but the deed is done. Ishan has directed Aditya to bill his sister for the greenhouse, and that turns out to be the biggest surprise for her. She declines to pay, and Ishan tells Aditya he cannot afford it. Aditya is now out, not only for payment for his many hours of hard work but cash for the materials he used. He files a civil suit to claim against both Tanu and Ishan. Decide.
