Legal Principle Agreements in restraint of trade are void and unenforceable Fact Situation Manu has ...........

Indian Contract Act (ICA)1872 Valid and Void Contracts

Legal Principle: Agreements in restraint of trade are void and unenforceable.

Fact Situation: Manu has been working as a blacksmith in his village for many decades. Somu has beenundergoing training with him for the past three years. After his training is over, Somu enters into anagreement with Manu that he will not start a competing business in the same village while Manu is alive.

Which of the following statements is the most appropriate in relation to the legal principle stated above?

This agreement is void and unenforceable since it is a restraint on trade.

This agreement is valid and enforceable since Manu is Somu’s teacher.

This agreement is valid but not enforceable after Manu’s death.

This agreement is valid and enforceable since it is to protect Manu’s interest in consideration forteaching Somu to be a blacksmith.

Explanation:

This agreement is void and unenforceable since it is a restraint on trade, because restraint that means keeping the other person in control hence the agreement is void,
Hence, option 1 is the correct answer.