Ch 2 Void Contracts

Void Contracts PUTTU GURU PRASAD INC GUNTUR

When are contracts said to be void? A

Contract not enforceable in law is a void contract  Exturpi causa non oritur actio (No action arises from a base cause) In pari delicto potior est conditio defendantis: (In cases of equal guilt, the defendant is in a better position)

 May

become void even subsequently  When they are voidable and the aggrieved party get them declared it void  Even a valid contract at the beginning may become unenforceable in the later stage

VOID AGREEMENTS MAY BE DUE TO Incompetent parties Mutual Mistake of Fact Unlawful consideration object Unlawful in part Without consideration Restraint of marriage Restraint of legal proceedings Uncertain and ambiguous Wagering contracts Impossible Acts

Suit for Anticipatory Breach of Contracts  Where

the one of the party expects the other party will breach the other party will actually breach the contract If A contracts with B to Act and at the same time agrees to Act with C B can expect a breach – which is called as anticipatory breach

Illegal and Immoral Agreements  Illicit

cohabitation  Sexual immorality  Agreement to interfere with the marital relations  Agreements to perform the acts, which are against good public morals

Agreements in Restraint of Marriage  The

agreement to restrain the freedom to marriage  To marry only for a certain period of time, only with the particular person, or not to marry at all All such agreements are void  Exception- Restraint of a minor’s marriage

Agreement in Restraint of Trade      

Any body is restrained from exercising a right to Practice any lawful profession, Trade or business Art 19 (1) (g) of Constitution of India Here the restraint may be partial general or special or complete All such agreements are void except under the following cases>Those created under a statute (Good Will) >Those arising out of judicial interpretations

Agreement in Restraint of Legal Proceedings  Restraining contractual rights

Absolutely restrict the parties in exercising a right to enforce the legal proceeding  Or agree to limit the time period within which the party may sue to enforce the contractual rights  E.g. That a person will not file a suit to realize the price of the sale,  Alter the time period to sue to 1 yr where a suit can be filed up to 3 yrs  But----- If it is partially restricted- For e.g. to file within the jurisdiction of the Hyderabad court or the pecuniary jurisdiction up to only a specified amount Exceptions  Reference of the future disputes to arbitration  Existing disputes to arbitration is valid 

Wagering Agreements  

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Agreements by way of wager A promise to give money or money’s worth upon the determination or ascertainment of an uncertain event is wagerWhere two persons hold the opposite view for a future uncertain event to win money or a stake Win loss to be dependent on the uncertain event Ingredients- Uncertain event, Mutual chance of winning and losing, neither party to have control of the event No other interest in the contract other than be a mere wager to win money or stake Void contracts Exceptions- Horse race, Crossword puzzle etc