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Lecture 7


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Lecture 7

  1. 1. Legality <br />of <br />Object<br />
  2. 2. LEGALITY OF OBJECT<br /> According to Section 23 of the Act, the object of an agreement isunlawful in the following cases:<br />If it is forbidden by law: <br />[Case: Srinivas v. Raja Ram Mohan]<br /> A loan granted to the guardian of a minor to enable him to celebrate the minor’s<br /> marriage<br />
  3. 3. It is in contravention of the Child Marriage Restraint Act and is illegal and cannotbe recovered<br />2. If it is of such a nature that if permitted, it would defeat the provisions of any law<br />
  4. 4. [Alexander v. Rayson]<br />A let a flat to B at a rent of £1200 a year. <br />With a view to reduce the municipaltax A made two agreements with B. One, by which the rent was stated to be £450only and the other, by which B agreed to pay £750 for services in connection with<br /> the flat.<br />Held : A could not recover £750 since the agreement was made to defraud themunicipal authority and thus void<br />
  5. 5. 3. If it is fraudulent<br />Example:A, B and C enter into an agreement for the division among them of gains acquiredor to be acquired, by them by fraud. The agreement is void as its object is unlawful<br />
  6. 6. 4. If it involves or implies injury to the person or property of another<br /> [Case: Ram Saroop v. Bansi]<br />A borrowed Rs. 100 from B. He (A) executed a bond promising to work for B<br /> without pay for 2 years and in case of default agreed to pay interest at a very<br /> exorbitant rate and the principal amount at once.<br />Held : The contract was void<br />
  7. 7. 5. If the Court Regards it as Immoral <br /> [Baivijli v. HamdaSagar]<br /> M advanced money to R , a married woman to enable her to obtain a divorce from her husband. M agreed to marry her as soon as she could obtain a divorce. <br />Held: M could not recover advanced money because the object of agreement was immoral.<br />
  8. 8. 6. If it is opposed to public policy<br />Trading with enemy<br />(ii) Agreements for stifling prosecution<br />(iii) Contracts in the nature champerty and maintenance<br />
  9. 9. (iv) Agreements for the sale of public offices and titles<br />[Case: Saminathan v. Muthusami ]<br /> A promises to pay a sum to B in order to induce him to retireso as to provide room for A’s appointment to the public office held by B<br />Held: Theagreement is void<br />
  10. 10. (v) Agreements in restraint of parental rights<br />[GidduNarayanish v. Mrs. Annie Besant]<br />A father having two minor sons agreed to transfer their guardianship in favour of<br /> Mrs. Annie Besant and also agreed not to revoke the transfer. <br />Subsequently, he filed a suit for recovery of the boys and a declaration that he was the rightful guardian, <br />
  11. 11. Held: TheCourt held that he had the right to revoke his authority and get back the children. <br />(vi) Marriage brokerage<br /> [Venkatakrishna v. Venkatachalam ]<br /> A sum of money was agreed tobe paid to the father in consideration of his giving his daughter in marriage.<br /> Held: Such a promise amounted to a marriage brokerage contract and was void<br />
  12. 12. (vii) Agreement in restraint of marriage<br />(viii) Agreements in restraint of legal proceedings<br />(ix) Agreements in restraint of trade<br />
  13. 13. [Oakes & Co. v. Jackson ]<br />J, an employee of a company, agreed not to employ himself in a similar concernwithin a distance of 800 miles from Madras after leaving the company’s service.<br /> Held : The agreement was void<br />
  14. 14. Exceptions: [Cases in which restraint of trade is valid in India]<br />Sale of goodwill<br />[Goldsollv. Goldmand]<br />S, a seller of imitation jewellery, sells his business to B and promises not to carry onbusiness in imitation jewellery and real jewellery.<br />
  15. 15. Held : The restraint with regard to imitation jewellery was valid but not regarding realjewellery<br />2. Partners’ agreement: <br />3. Service agreements<br />Any other engagement during his employment [ valid]<br />A similar engagement after the termination of his services [void]<br />
  16. 16. A agreed to become assistant for 3 years to B who was a doctor practising at Chennai.<br />It was agreed that during the term of the agreement A was not to practise on his ownaccount in Chennai. <br />After one year, A started his own practice.<br />
  17. 17. Held : The agreement was valid and A could be restrained by an injunction from doingso.<br />Example<br />A bank appoints an officer subject to the condition that afterceasing to be in service he would not join the service of any other bank in India for a periodof 5 years<br />
  18. 18. Held: The bank shall not be in a position to enforce such condition.<br />(x) Agreement restricting personal liberty<br />(xi) Agreement tending to create interest opposed to duty<br />
  19. 19. THANK YOU<br />11<br />