An agreement which restrains an outgoing partner from carrying on the business similar to that of th...........

Indian Contract Act (ICA)1872 Valid and Void Contracts

An agreement which restrains an outgoing partner from carrying on the business similar to that of the firm, is

Void

Voidable

Valid

Unlawful

- Option 1: Void

- A contract is void if it cannot be enforced by law.

- This typically involves agreements that lack consideration, involve illegal activities, or lack consent.

- Restraint on trade can sometimes be considered void if unreasonable.

- Option 2: Voidable

- A voidable contract is initially valid but can be annulled.

- Reasons for annulment can include misrepresentation or duress.

- Restraint on trade doesn’t typically make a contract voidable.

- Option 3: Valid

- Some agreements restraining trade are valid if they are reasonable and protect legitimate business interests.

- Restraints must not be excessive in scope or time.

- Contracts with outgoing partners can fall under this category.

- Correct Answer

- Option 4: Unlawful

- An unlawful contract involves illegal activities or goes against public policy.

- A reasonable restraint of trade is not unlawful.

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