Category: Contract Law

ISSUE:

Can the agreement between the parties said to be unconscionable and opposed to public policy?

Whether the injunction was reasonable?

RULE:

If the restraints on one's freedom to practice and indulge in any trade is reasonable then the restraint is valid and good. The restraints must not be harsh, one sided, unconscionable or against public policy.

ISSUE:

Whether the right of first refusal under Clause 31(b) of the permission agreement entered into between the appellant and the respondent is void under Section 27 of the Indian Contract Act, 1872 has been in restraint of trade.

RULE:

Putting a restriction on someone's freedom to enter into a contract is void. The restrictive covenant was negative in nature because it was forcing the respondent to do something.

ISSUE:

Whether the plaintiff can recover the half of $50 dollars that was given by him to the defendant as security for enjoying the services provided by the latter?

RULE:

The principle, "in pari delicto potior est conditio possidentis" that had been founded upon the principles of public policy had been applied. It stated that the courts will not assist the plaintiff who has handed over money in pursuance of an immoral or illegal agreement or has paid over the money, fully knowing its nature.

ISSUE:

Whether the agreement between the parties was such that the it caused the respondent a restraint to trade?

RULE:

Section 28(b) of the ICA states that every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.

ISSUE:

Whether the plaintiff can realize his money back even though the object of the agreement defeated the provisions of the law?

RULE:

Section 23 of the ICA states that Consideration or object of an agreement is lawful unless it is forbidden by law, or is fraudulent or involves or implies injury to the person or property of another. Also if the Court regards the consideration or object immoral or opposed to public policy, it will not be enforced and makes the agreement void.

As the agreement of which the object was unlawful being opposed to a statutory provision, the plaintiff cannot claim relief under Section 65 of the Contract Act.

ISSUE:

Whether Patel can recover the amount from the defendant even though it was given to do an illegal act?

RULE:

A claimant will be prevented from enforcing his claim to property because, it was paid to perform an illegal act, unless, not allowing his claim would be contrary to relevant public policy, or it would be disproportionate to not allow him to recover.