Indian contract act, 1872
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CAPACITY TO CONTRACT
VOID AGREEMENTS (1) Agreement in restraint of marriage (Section 26): Every agreement in restraint of marriage of any person other than a minor, is void. So if a person, being a major, agrees for good consideration not to marry, the promise is not binding and considered as void agreement. (2) Agreement in restraint of trade (Section 27): An agreement by which any person is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Absolute restraint of trade is void but partial restraint of trade is valid.
(3) Agreement in restraint of legal proceedings (Section 28): An agreement in restraint of legal proceeding is the one by which any party thereto is restricted absolutely from enforcing his rights under a contract through a Court or which abridges the usual period for starting legal proceedings. A contract of this nature is void. is a valid contract. 4. Agreement- the meaning of which is uncertain (Section 29): An agreement, the meaning of which is not certain, is void, but where the meaning thereof is capable of being made certain, the agreement is valid.
5. Wagering agreement (Section 30): An agreement by way of a wager is void. It is an agreement involving payment of a sum of money upon the determination of an uncertain event. The essence of a wager is that each side should stand to win or lose, depending on the way an uncertain event takes place in reference to which the chance is taken and in the occurrence of which neither of the parties has legitimate interest. Example: A agrees to pay 50,000 to B if it rains, and B promises to pay a like amount to A if it does not rain, the agreement will be by way of wager. But if one of the parties has control over the event, agreement is not a wager.
Contracts similar to wager but are not void: (i) Chit fund: In case of a chit fund, a certain number of persons decide to contribute a xed sum for a speci ed period and at the end of a month, the amount so contributed is paid to the lucky winner of the lucky draw. (ii) Commercial transactions or share market transactions (ii) Games of skill and Athletic Competition: According to the Prize Competition Act, 1955 prize competition in games of skill are not wagers provided the prize money does not exceed 1,000. (iv) A contract of insurance: A contract of insurance is a type of contingent contract and is valid under law and these contracts are di erent from wagering agreements
Questions Question 1: "Mere silence does not amount to fraud". Discuss. Question 2: "Though a minor is not competent to contract, nothing in the Contract Act prevents him from making the other party bound to the minor". Discuss. Question 3: "An agreement, the meaning of which is not certain, is void". Discuss. Question 4: Who are disquali ed persons to do the contract?
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