24/11/2011

Things should be known before signing of an agreement.

Agreement means" Every promise or every set of promises, forming consideration for each other" A promise means " when the person to whom the proposal is made, signifies his assent thereto , the proposal is said to be accepted. Therefore, for all agreements, there must be a proposal and an acceptance of that proposal. But mare acceptance of a proposal by a person not make agreement but the person who is accepting the proposal must be legally capable to accept that proposal otherwise that accepted agreement is void  ab initio.


As per Indian Contract Act: Following are the circumstances under which  agreements are void ab initio.

  • An agreement with minor
  • An agreement with a person with unsound  mind
  • An agreement with a person disqualified by an other law
  • An agreement without consideration
  • An agreement with an unlawful object
  • An agreement having uncertain terms
  • An agreement having terms not capable of performance.
  • An agreement marked by mutual mistake.
  • Agreements declared void by the contract Act like:   
               (i) Agreement in restrain of marriage.
               (ii)Agreement in restrain of trade.
               (iii) Agreement in restrain of legal proceedings
               (iv) Agreement by way of wager.