Void Agreement business law ppt (1).pptx

Void Agreement business law ppt (1).pptx

1. void and voidable agreement

2. Understanding the meaning of void and agreement Void : In Law , void means of no legal effect. An action, document, or transaction which is void is of no legal effect whatsoever: an absolute nullity—the law treats it as if it had never existed or happened.  Agreement : The act of agreeing or of coming to a mutual arrangement. the state of being in accord. an arrangement that is accepted by all parties to a transaction. a contract or other document delineating such an arrangement. unanimity of opinion; harmony in feeling: agreement among the members of the faculty.

3. What is void agreement? A void Agreement cannot be enforced by law.An agreement to carry out an illegal act is an example of a void agreement . For example, a contract between drug dealers and buyers is a void contract simply because the terms of the contract are illegal. In such a case, neither party can go to court to enforce the contract .

4. EXPRESSLY DECLARED VOID AGREEMENT There are certain agreements, which are expressly declared to be void. They are as follows: (1)      Agreement by a minor or a person of unsound mind.[Sec(11)] (2)      Agreement of which the consideration or object is unlawful[Sec(23)] (3)      Agreement made under a bilateral  mistake of fact material to the agreement[Sec(20)] (4)      Agreement of which the consideration or object is unlawful in part and the illegal  part can not be separated from the legal part [Sec(24)] (5)      Agreement made. without consideration.[Sec(25)] (6)      Agreement in restraint of marriage [Sec(26)] (7)      Agreement in restrain of trade  [Sec(27)] (8)      Agreement  in restrain of legal proceedings[Sec(28)] (9)      Agreements the meaning of which is uncertain [Sec(29)] (10)    Agreements by way of wager [Sec(30)] (11)    Agreements contingent on impossible events [Sec(36)] (12)    Agreements to do impossible acts [Sec(56)]

5. Agreement in restraint of marriage Section 26 – Any agreement that restraints the marriage of a major is a void agreement. This does not apply to minors. But if an adult agrees for some consideration not to marry , such an agreement is expressly a void agreement according to law. So A agrees that if B pay him 50000/- he will not marry such an agreement is an void agreement.

6. Case study CASE OVERVIEW In the small town of Harmony ville , a peculiar case emerged when two individuals, Alex Turner and Morgan Hayes, entered into a unique agreement that imposed restrictions on their marriage. The case raised questions about the legality and enforceability of agreements in restraint of marriage. BACKGROUND Alex and Morgan, both successful professionals in their respective fields, decided to get married after a whirlwind romance. However, before tying the knot, they drafted a prenuptial agreement that included an unusual clause: a restraint on the right to marry anyone else for a period of five years following their wedding day. .

7. Terms of the Agreement: Monogamous Restriction: Alex and Morgan agreed that neither party would enter into any marriage or marital-like relationship with another person during the first five years of their marriage. Financial Incentives: To incentivize compliance, the agreement stipulated that if either party violated the restraint and entered into a marriage within the specified period, they would forfeit certain financial benefits outlined in the prenuptial agreement. Mutual Consent: Importantly, the agreement highlighted that both parties entered into this arrangement willingly, fully understanding the implications and consequences. Resolution: The case went to court, where legal experts debated the enforceability of the marriage restraint clause. Ultimately, the court had to balance the principles of contractual freedom with the need to protect fundamental rights. In its ruling, the court considered the following: Public Policy: While individuals have the freedom to contract, the court held that agreements substantially restricting the right to marry were contrary to public policy. Fundamental Rights: The court recognized the fundamental right to marry as a protected constitutional right and concluded that the agreement unreasonably limited this right. Mutual Consent: The fact that both parties entered into the agreement willingly did not outweigh the public policy concerns and the infringement on fundamental rights.

8. Outcome : The court declared the marriage restraint clause unenforceable and struck it from the prenuptial agreement. Alex and Morgan were free to pursue their respective paths without the legal impediment of the five-year marriage restraint. This case study highlights the delicate balance between contractual freedom and the protection of fundamental rights in the context of agreements in restraint of marriage.

9. Agreement in restraint of trade Section 27 – Any agreement that restrains from plying a trade or practicing a legal profession or exercising a business of any kind is an expressly void agreement. Such an agreement violates the constitutional rights of a person.

10. Case study Case Overview: In the bustling city of Commerce ville , a legal dispute emerged between two former business partners, Emma Reynolds and Daniel Carter, who had signed a non-compete agreement as part of their business venture. This case raises questions about the enforceability and ethical considerations of agreements on restraint of trade. Background: Emma and Daniel, seasoned entrepreneurs, co-founded a successful e-commerce platform called TechTrade Solutions. As they decided to part ways due to creative differences, they drafted a separation agreement that included a non-compete clause

11. Terms of the Agreement : Geographic Restriction: The non-compete clause specified a radius of 50 miles from Commerce ville within which Emma was prohibited from engaging in any similar e-commerce business for a period of two years. Scope of Activities: The agreement detailed the specific activities and business practices that Emma was restricted from pursuing, including developing, operating, or advising any e-commerce platform similar to Tech Trade Solutions. Consideration: In exchange for agreeing to the non-compete terms, Emma received a lump-sum payment and a promise from Daniel not to compete within the same geographic area and business scope. Resolution : The case proceeded to court, where arguments were presented on both sides. Reasonableness of Restrictions: The court examined whether the 50-mile radius and two-year duration were reasonable. Considering the nature of the e-commerce business and the local market dynamics, the court found the restrictions to be overly broad. Legitimate Business Interest: Daniel argued that protecting Tech Trade Solutions' customer base and confidential information justified the non-compete clause. The court acknowledged the importance of protecting legitimate business interests but emphasized that the restrictions must be tailored to achieve that goal. Consideration: The court scrutinized the consideration provided to Emma. While the lump-sum payment was deemed fair, the promise from Daniel not to compete was found to lack sufficient consideration.

12. Outcome: The court ruled that the non-compete clause was partially enforceable. It narrowed the geographic scope to 20 miles and reduced the duration to one year. Additionally, the court held that the consideration provided was fair for the revised restrictions. This case study illustrates the legal scrutiny applied to agreements on restraint of trade, emphasizing the importance of reasonableness, legitimate business interests, and fair consideration in crafting enforceable non-compete clauses.

13. AGREEMENT of restraint of legal proceedings Section 28 – An agreement that prevents one party from enforcing his legal rights under a contact through the legal process (of courts, arbitration, etc) then such an agreement is an void agreement.

14. Case study Case Overview: In the city of Jurisville , a contentious business dispute between two companies, Horizon Tech Solutions and Quantum Dynamics, took an unexpected turn when the parties entered into an agreement to restrain legal proceedings. This case delves into the circumstances leading to the agreement, its terms, and the legal implications. Background: Horizon Tech Solutions and Quantum Dynamics were fierce competitors in the technology sector. A series of disputes, involving intellectual property rights and market competition, had escalated into a protracted legal battle with both parties incurring substantial legal expenses.

15. Terms of the Agreement: Recognizing the financial strain and uncertainty associated with prolonged litigation, the CEOs of both companies, Sarah Miller of Horizon Tech Solutions and Robert Turner of Quantum Dynamics, engaged in negotiations facilitated by a neutral third party. The result was an agreement to restrain legal proceedings for a specified period. Temporary Halt: The agreement stipulated a temporary halt to all ongoing litigation between the two companies for a period of six months. Mediation Clause: During the restraint period, the parties agreed to participate in mediation sessions to explore potential resolutions and settlements. Confidentiality: Both parties committed to maintaining strict confidentiality regarding the details of the agreement and the mediation process.

16. Resolution: As the six-month period concluded, the CEOs revisited their positions. The unforeseen technological advancement became a focal point of renewed negotiations, leading to a breakthrough in mediation. The parties, recognizing the changed landscape, revised their agreement: Extension of Restraint: Both companies agreed to extend the restraint period by three months to allow for continued negotiations and assessments in light of the technological advancement. Amended Mediation Terms: The parties revisited the terms of the mediation, introducing a new mediator with expertise in the emerging technology. Flexibility: The agreement incorporated flexibility, allowing either party to terminate the restraint if no resolution was achieved within the extended period. Outcome: The extended restraint period and amended mediation terms led to a comprehensive settlement between Horizon Tech Solutions and Quantum Dynamics. The resolution not only addressed the initial disputes but also provided a framework for collaboration on the new technological frontier.

17. Agreement void through uncertainty If an agreement is uncertain in meaning and cannot be clarified through legal or business proceedings, the agreement is void. Part of what makes a legally binding contract is the obligation being clear and therefore able to be fulfilled. If the language used cannot be interpreted by the parties involved or a third party, the contract has no legal effect.

18. Case study Case Overview: In the coastal town of Clarity Bay, a contract dispute unfolded between a property developer, Coastal Estates Ltd., and a construction company, BuildRight Constructions. The disagreement centered around a development agreement that was ultimately deemed void due to inherent uncertainties. Background: Coastal Estates, aiming to revitalize a waterfront district, engaged BuildRight Constructions to undertake a major construction project. The agreement between the parties was intended to outline the scope of work, timelines, and financial terms. However, ambiguities and uncertainties crept into the contract, leading to a breakdown in communication.

19. Terms of the Agreement: Vague Timelines: The agreement vaguely mentioned project completion "within a reasonable timeframe," without specifying milestones or deadlines. Ambiguous Payment Terms: Financial terms were loosely defined, referring to periodic payments based on project progress, but lacking clarity on specific amounts and payment schedules. Uncertain Scope: The scope of work was outlined broadly, using terms like "comprehensive construction services" without detailing specific deliverables Resolution Attempts: Recognizing the challenges, Coastal Estates and BuildRight attempted to resolve their differences through negotiation and mediation. However, the inherent uncertainties in the agreement proved to be a stumbling block, preventing a mutually acceptable resolution

20. Legal Determination: Failing to resolve the disputes amicably, the case proceeded to court. The central legal issues were: Certainty of Terms: The court examined whether the terms of the agreement were clear, specific, and certain enough to be enforceable. Mutual Intent: The court considered whether both parties had a mutual understanding of the essential terms of the contract. Outcome: The court determined that the agreement was void due to uncertainty. The lack of specific timelines, payment terms, and a clearly defined scope made it impossible to ascertain the parties' intentions. Consequently, the court ruled that the contract did not meet the essential requirements for a valid and enforceable agreement.

21. Presented by – harkamal singh (231234) Aryan garg (231241)