Question

Agreement in restrain of trade are void. Critically examine the statement​

Answer 1

Answer:

It could be void ab initio- i.e., an agreement to do an illegal act is void ab initio, that is, it is void from the moment it was first made.

It is against the principles of justice and fairness or against public policy.

It becomes subsequently void because of a change in the law.

It has already been fully performed.

The case of Lowe v. Peers set a precedent in the law relating to restraint of marriage. In this case, the defendant contended that if he marries any other person except the plaintiff, he would give her 1000 pounds within three months of his marriage. It was held that such an agreement is void.

In the recent case of Shrawan Kumar v. Nirmala, the petitioner filed a suit in the Allahabad High Court asking the court for an injunction on the defendant’s marriage to the other person. The plaintiff contended that the defendant had promised to marry him, and therefore her marriage with the other person should be injuncted against. Pankaj Mithal, J. cited Section 26 of the Indian Contract Act, 1872 while pronouncing his judgment, whereby he dismissed the petition.

Explanation:

Answer 2

Agreement in restrain of trade is void

Explanation:

• Every agreement wherein anyone is "restrained" from "exercising" a lawful trade, profession, or any business, is to that extent "void".
• In India, everyone is free to do any lawful business , trade or occupation. The "Indian Constitution" has granted this right to all people. Right to trade and the right to profession are as critical as the right to live. An agreement  which limits trade and professional freedom of a party cannot be enforced.
• The general rule is that all trade-restricting agreements are void. However, it can be "void ab initio", that is, an "agreement" to do an illegal act is void from the moment it was first made. 
• However, for the following purposes, an agreement in restrain of trade valid.

1. It is against the principles of "fairness & justice" or against "public policy".
2. It becomes subsequently void due to a "change in the law".
3. It has already been fully "performed".

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