lecture7-111001013231-phpapp02
Transcript of lecture7-111001013231-phpapp02
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Legality
of
Object
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LEGALITY OF OBJECT
According to Section 23 of the Act, theobject of an agreement is unlawful in the
following cases:1. If it is forbidden by law:[Case: Srinivas v. Raja Ram Mohan]
A loan granted to the guardian of a minorto enable him to celebrate the minors marriage
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It is in contravention of the Child Marriage
Restraint Act and is illegal and cannot berecovered
2. If it is of such a nature that if permitted,it would defeat the provisions of anylaw
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[Alexander v. Rayson]
A let a flat to B at a rent of 1200 a year. With a view to reduce the municipal tax A
made two agreements with B. One, by
which the rent was stated to be 450 onlyand the other, by which B agreed to pay750 for services in connection with
the flat. Held : A could not recover 750 since theagreement was made to defraud themunicipal authority and thus void
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3. If it is fraudulent
Example: A, B and C enter into anagreement for the division among them of
gains acquired or to be acquired, by themby fraud. The agreement is void as itsobject is unlawful
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4. If it involves or implies injury to the
person or property of another[Case: Ram Saroop v. Bansi]
A borrowed Rs. 100 from B. He (A)
executed a bond promising to work for Bwithout pay for 2 years and in case ofdefault agreed to pay interest at a very
exorbitant rate and the principal amount atonce.
Held : The contract was void
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5. If the Court Regards it as Immoral
[Baivijli v. Hamda Sagar]M advanced money to R , a marriedwoman to enable her to obtain a divorce
from her husband. M agreed to marry heras soon as she could obtain a divorce.
Held: M could not recover advanced moneybecause the object of agreement wasimmoral.
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6. If it is opposed to public policy
(i) Trading with enemy
(ii) Agreements for stifling prosecution
(iii) Contracts in the nature champerty andmaintenance
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(iv) Agreements for the sale of public offices
and titles
[Case: Saminathan v. Muthusami ]
A promises to pay a sum to B in order toinduce him to retire so as to provide roomfor As appointment to the public office
held by B
Held: The agreement is void
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(v) Agreements in restraint of parental rights
[Giddu Narayanish v. Mrs. Annie Besant] A father having two minor sons agreed to
transfer their guardianship in favour ofMrs. Annie Besant and also agreed not torevoke the transfer.
Subsequently, he filed a suit for recoveryof the boys and a declaration that he wasthe rightful guardian,
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Held : The Court held that he had the right to
revoke his authority and get back thechildren.
(vi) Marriage brokerage[Venkatakrishna v. Venkatachalam ]
A sum of money was agreed to be paid to
the father in consideration of his giving hisdaughter in marriage.Held : Such a promise amounted to a
marriage brokerage contract and was void
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(vii) Agreement in restraint of marriage
(viii) Agreements in restraint of legal
proceedings
(ix) Agreements in restraint of trade
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[Oakes & Co. v. Jackson ]
J , an employee of a company, agreed notto employ himself in a similar concernwithin a distance of 800 miles from Madrasafter leaving the companys service.
Held : The agreement was void
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Exceptions: [Cases in which restraint of
trade is valid in India]
1. Sale of goodwill
[Goldso l l v . Go ldm and ] S , a seller of imitation jewellery, sells his
business to B and promises not to carry
on business in imitation jewellery and real jewellery.
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Held : The restraint with regard to
imitation jewellery was valid but notregarding real jewellery
2. Partners agreement:3. Service agreements (i) Any other engagement during his
employment [ valid](ii) A similar engagement after the
termination of his services [void]
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A agreed to become assistant for 3 yearsto B who was a doctor practising atChennai.
It was agreed that during the term of theagreement A was not to practise on hisown account in Chennai.
After one year, A started his own practice.
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Held : The agreement was valid and Acould be restrained by an injunction fromdoing so.
Example A bank appoints an officer subject to thecondition that after ceasing to be in servicehe would not join the service of any otherbank in India for a period of 5 years
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Held: T he bank shall not be in a position to
enforce such condition.
(x) Agreement restricting personal liberty
(xi) Agreement tending to create interestopposed to duty
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THANK YOU
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