C.A. CONTRACT ACT 26,27 AND 28

  Section 26,27 and 28 

Section 26.

Agreement in restraint of marriage ----

Every agreement in restraint of the marriage of any person 

Other than a minor is void .

Landmark decision.

Rai rani versus Gulab rani 

Two widows of a death person had entered into an agreement if any of them remarried she would forfeit her right in property .

Decision ----it was held in this case that this contract was not void .this contract does not restrain over marriage .

Section 27----

Every agreement by which any one is restrained from exercising a lawful profession ,trade or business of any kind is to that extent void .

Exception 1----saving of agreement not to carry on business of which good will is sold ---

One who sells the good will 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 there in provided that such limits appear to the court reasonable regard being had to the nature of the business.

Landmark case ---

Madhav chandra versus Rajkumar 

Facts---Plaintiff and respondent used to  run shops  in same locality .here respondent had entered into a contract with plaintiff that he will give money to  plaintiff if he will establish his shop at another place .the plaintiff did so .when respondent did not give money .case had been filed .

Decision ----this agreement was void . because trade can't be restricted by contrac********************

Land mark case no .2

Nordanfelt versus nordan felt guns and ammunition company ltd.

Facts ---the inventor of gun and dynamite had sold good will of his business to buyer .he had contracted fir two restrictions with buyer 

1.he will not do such business for 25 years 

2.he had gone to another company for service 

The plaintiff had filed a suit to stop him .

The first part is valid but second part is void .because such restrictions are against public policy.

Landmark case no.3

Vanquvar malt and sake bearing company ltd.versus bankoover beeries ltd.

A company had got licence of beer and booze .but company used to make sake only .which was japanese booze .the goods had been purchased by government.this company had entered into a contract with another company of booze .the former company had sold it's goodwill of booze and beer 🍺.case had been filed by second company.

Decision ---the first company used not be make booze .so that company had no right to sell this goodwill .in this way this contract was without base and worthless.

Land mark case no.4

Sekh kalu versus Ram sharan Bhagat 

A combseller had entered into a contract with all comb makers of Patna .they would sell goods to him for life  and  after his death to his heir .it was decided that contract was void under section 27 .

Exception

1.11(2)----parteners can make agreement that they cannot do any business during continuence of partnership 

2. 36(2)--any partner can make a contract with another partner that he will not carry a business during such limits and specified periods 

3.section 54 ---in the case of dissolution the contract can be made that some partners or all partners cannot do business in local limits and 

Section. 28 

Agreement in restraint of legal proceeding,void ----(every agreement,

A.by which any party there to is restricted absolutely from enforcing his right under or in respect of any contract by the usual legal proceeding in the ordinary tribunals or which limits the time within which he may thus enforce his right or

B.which extinguishes the right of any party thereto or discharge 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 right  is void to that extent.

Exception 1-----saving of contract to refer to arbitration dispute that may arise ----this section shall not render illegal a contact ,by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute of the dispute so referred .

Exception 2 ----saving of contract to refer questions that have already arisen or affect any provision of any law in force for the time being to reference to arbitration.

Landmark judgement 

K.coringa oil company versus coyaglar 

This section is applicable in such agreement in which the parties are restrained to take shelter of court and judicial proceedings.

If this condition is applicable that no suit can be filed to breach of contract .this condition is void .both parties are prevented to enforce their right.

But right to appeal cannot be prevented from this section.