As a professional, I understand the importance of not only creating informative content but also ensuring that it is optimized for search engines. In this article, we will be discussing the concept of void agreements under the Indian Contract Act.
The Indian Contract Act, 1872 governs all contracts in India, and it defines a contract as an agreement between two or more parties, which is enforceable by law. However, not all agreements are legally enforceable, and this is where the concept of a void agreement comes in.
What is a Void Agreement?
According to Section 2(j) of the Indian Contract Act, a void agreement is an agreement that is not enforceable by law and creates no legal obligation between the parties involved. In simpler terms, a void agreement is an agreement that is considered null and void in the eyes of the law.
There are various reasons why an agreement can be considered void, and we will discuss some of them below:
1. Agreement made under coercion, undue influence or fraud
An agreement made under coercion, undue influence or fraud is considered void. Coercion refers to the use of force to enter into an agreement, while undue influence refers to the use of trust or authority to influence someone to enter into an agreement. Fraud, on the other hand, refers to the deliberate misrepresentation of facts to induce someone to enter into an agreement.
2. Agreement with unlawful consideration or object
An agreement with an unlawful consideration or object is considered void. Any agreement that involves the commission of a crime, injury to a person or property, or is against public policy is considered unlawful.
3. Agreement with a minor or a person of unsound mind
Any agreement entered into with a minor (a person under the age of 18 years) or a person of unsound mind (a person who is incapable of understanding the terms and conditions of an agreement) is considered void.
4. Agreement in restraint of marriage or trade
An agreement that puts a restraint on a person`s marriage or trade is considered void. For example, an agreement between two businesses not to compete with each other is void.
Effects of a Void Agreement
A void agreement is considered null and void since it is not enforceable by law. This means that neither party can enforce the agreement, nor can they claim any damages for the breach of the agreement. Furthermore, any transaction made under a void agreement is also considered void.
In conclusion, a void agreement is an agreement that is not enforceable by law and creates no legal obligation between the parties involved. The Indian Contract Act lists various reasons why an agreement can be considered void, including coercion, fraud, unlawful consideration or object, and restraint of marriage or trade. It is important for individuals and businesses to understand what constitutes a void agreement to avoid any legal complications.