Clause (e) of Section 2 of Indian
Contract Act 1872, defines an agreement as every promise and every set of
promises forming consideration of each other in an agreement. Agreements are
instruments wherein two or more parties agree over something, to do some work,
to sell or purchase a property. The essential requirement of an agreement are
consideration and objects.
Void Agreements are those agreements
which cannot be enforced in any Court of Law. An agreement not enforceable by
law is said to be void. An agreement which does not comply with the mandatory
provisions of a statute is void. If, in an agreement, consideration or a part
of consideration or the object is unlawful, such an agreement is a void
agreement. Neither of the party to the agreement can seek remedy for violation
of such an agreement in any court of law.
In general, any agreement without
consideration is void. Section 25 of Indian Contract Act 1872, has certain
exceptions to this general rule and the following agreements without
consideration are not void:
a) An agreement which is made in
writing registered and made out of natural love and affection by a person
standing in a near relationship;
b) An agreement which is promise made
to compensate for something done for the promisor by a person voluntarily. The
compensation may be whole or in part;
and
C) An agreement which is a promise to
pay a debt which is barred by limitation. Such a promise must be in writing and
signed by the concerned person or his authorized agent. The debt may in whole
or in part.
By gift one transfers the property
without consideration. It is a unilateral act of one person. It is not a
contract between parties. Section 25 of the Indian Contract Act provides that
the provisions of the section do not affect the validity of any gift actually
made as between the Donor and Donee,
though no consideration is passed.
Consideration at most times is the
market value of the property. The Indian Contract Act simply states that agreements without consideration are void.
The Act does not refer to adequacy of consideration. It is matter between the
parties to the agreements to decide the amount of consideration. The testing
factor is whether the consent was given freely for inadequate consideration.
The courts will take inadequacy of consideration in determining whether consent
was given freely or not in resolving the disputes. But the agreements cannot be
void on the basis of inadequate consideration alone.
As stated earlier, if the object of an
agreement is unlawful, such an agreement is void. Any agreement which restrains
any party to the agreement from enforcing his rights by the usual legal proceedings in the ordinary Courts or
Tribunals or which limits the time within which he may enforce his rights is
void.
The consideration and objects are
lawful unless,
1) They are forbidden by laws in
force.
2) They are of such nature that if
permitted they would defeat the provisions of any law.
3) They are fraudulent.
4) They involve or imply injury to the
person or property of another.
5) The courts regard them as immoral
or opposed to public policy.
Suppose in an agreement to sell, there
is a clause that the vendor shall complete the sale transaction within three
months of the date of agreement to sell, but fails to comply with this
requirement.
Non-compliance of a clause in the
agreement to sell would not make the agreement void. The vendor has legal remedy open to him upto
three years from the date of such a lapse.
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