Void Contracts

PUTTU GURU PRASAD

INC GUNTUR
When are contracts said to be
void?
A Contract not enforceable in law is a void
contract
 Exturpi causa non oritur actio
(No action arises from a base cause)
In pari delicto potior est conditio defendantis:
(In cases of equal guilt, the defendant is in a better
position)
 May become void even subsequently
 When they are voidable and the aggrieved
party get them declared it void
 Even a valid contract at the beginning may
become unenforceable in the later stage
VOID AGREEMENTS
MAY BE
DUE TO
Incompetent
parties

Mutual Mistake of Fact

Unlawful consideration
object
Unlawful in part

Without consideration

Restraint of marriage

Restraint of legal proceedings

Uncertain and ambiguous

Wagering contracts

Impossible Acts
 Suit for Anticipatory Breach
of Contracts
 Where the one of the party expects the
other party will breach the other party will
actually breach the contract-
 If A contracts with B to Act and at the
same time agrees to Act with C B can
expect a breach – which is called as
anticipatory breach
 Illegal and Immoral
Agreements
 Illicit
cohabitation
 Sexual immorality
 Agreement to interfere with the
marital relations
 Agreements to perform the acts,
which are against good public morals
 Agreements in Restraint of
Marriage
 The agreement to restrain the freedom to
marriage
 To marry only for a certain period of time,
only with the particular person, or not to
marry at all
All such agreements are void
 Exception- Restraint of a minor’s marriage
 Agreement in Restraint of
Trade
 Any body is restrained from exercising a right to
 Practice any lawful profession, Trade or business
Art 19 (1) (g) of Constitution of India
 Here the restraint may be partial general or
special or complete
 All such agreements are void except under the
following cases-
 >Those created under a statute (Good Will)
 >Those arising out of judicial interpretations
 Agreement in Restraint of
Legal Proceedings
 Restraining contractual rights
 Absolutely restrict the parties in exercising a
right to enforce the legal proceeding
 Or agree to limit the time period within which
the party may sue to enforce the contractual
rights
 E.g. That a person will not file a suit to realize
the price of the sale,
 Alter the time period to sue to 1 yr where a suit
can be filed up to 3 yrs
 But----- If it is partially restricted- For e.g. to file
within the jurisdiction of the Hyderabad court or
the pecuniary jurisdiction up to only a specified
amount
Exceptions
 Reference of the future disputes to arbitration
 Existing disputes to arbitration is valid
 Wagering Agreements
 Agreements by way of wager
 A promise to give money or money’s worth
upon the determination or ascertainment of
an uncertain event is wager-
 Where two persons hold the opposite view for
a future uncertain event to win money or a
stake
 Win loss to be dependent on the uncertain
event
 Ingredients- Uncertain event, Mutual chance
of winning and losing, neither party to have
control of the event
 No other interest in the contract other than be
a mere wager to win money or stake
 Void contracts
 Exceptions- Horse race, Crossword puzzle etc