Question

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

Answer 1

Answer:

Section 27 provides that every agreement by which anyone is restrained from exercising a lawful profession or business of any kind, is to that extent void.

Every person in India is free to carry on any lawful business, trade or engage in any profession. This freedom has been guaranteed to every citizen by the Constitution of India. The right of trade and profession is as important as the right of the life. Just as a person does not have a right to deprive himself of his life, similarly, he cannot deprive himself of the right of trade and profession. An agreement. which puts restraint upon a party’s freedom of trade and profession shall not be enforceable.

Exceptions: The general rule is that all the agreements in restraint of trade, are void. However, following are the exceptions to the above general rule.

Sale of goodwill: According to Section 27, One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer or any person deriving title to the goodwill from him, carries on a like business therein. Provided that such limits appear to the court reasonable, regard being had to the nature of the business.

Please follow me

Answer 2

"Agreement in restrain of trade is void"

Explanation:

• Every "agreement/contract" wherein anyone is "restrained"(prevented/stopped)" from "exercising" a "lawful trade/profession/business", is to that extent "void".
• In India, everyone is free to do any "lawful business/trade/occupation". The "Indian Constitution" has "granted this right" to all people. "Right to trade" & the "right to profession" are as critical as the "right to live". An agreement  which limits/restraints/prevents "trade & 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".

To know more

Define general agreement on trade in services - Brainly.in

brainly.in/question/3191796