A agrees to pay a certain sum of money to B a rival shopkeeper if he closes his business for three m...........

Indian Contract Act (ICA)1872 Valid and Void Contracts

A agrees to pay a certain sum of money to B, a rival shopkeeper, if he closes his business for three months in a year. This agreement is

Void

Voidable

Valid

None of the above

- Option 1: Void

- A contract is void if it is against public policy or lacks consideration.

- Agreements that restrain trade or create a monopoly are generally void.

- Encouraging a rival to close business restricts free trade, making it void.

- Correct Answer: This agreement is void.

- Option 2: Voidable

- Applies when one party is not bound by it or was coerced into it.

- This scenario doesn’t involve coercion, so it’s not voidable.

- Option 3: Valid

- A valid contract meets all legal requirements.

- Since this contract restricts competition, it’s not valid.

- Option 4: None of the above

- Options 2 and 3 logically cover primary outcomes.

- Not applicable here as the void option is correct.

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