Which of the following agreements is expressly declared to be void under the Indian Contract Act, 1872?
Answer and explanation
Correct answer: C. An agreement in restraint of trade (Section 27)
- Step 1: Review the provisions of the Indian Contract Act, 1872 regarding agreements expressly declared void (Sections 24 to 30).
- Step 2: Section 27 specifically provides: "Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."
- Step 3: While narrow statutory exceptions exist (such as the sale of goodwill), agreements in general restraint of trade are declared void ab initio by the statute on grounds of public policy.
Answer
An agreement in restraint of trade (Section 27).
Practise more Indian Contract Act 1872: Essentials and Contingent Contracts.
Free questions with an explanation for every one, and full timed CA Foundation mock tests.
More Indian Contract Act 1872: Essentials and Contingent Contracts questions
- Under Section 2(h) of the Indian Contract Act, 1872, a contract is legally defined as:
- A contract to pay ₹1,00,000 if a merchant vessel does not return within one year is an example of:
- What is the legal effect of a contract entered into under coercion (Section 15)?
- Under the Doctrine of Quantum Meruit (meaning 'as much as earned'), a party is entitled to reasonable compensation when:
- A owes B ₹10,000. C, a third party, pays B ₹8,000 in full satisfaction of A's debt, which B accepts. B later sues A for the remaining balanc…