Contract Act, 1872 - Void Agreements And Contingent Contracts

Agreement is a promise and every set of promises forming consideration for each other. When an agreement is enforceable by law it is known as a contract. There are certain reasons due to which an agreement may become void.

Section 2(g) Indian Contract Act 1872 defined a Void Agreement as, "an agreement not enforceable by law". Some agreements are void ab-initio (Void from the Beginning). There are some agreement which, when made, are valid but later, due to change in conditions, the contracts becomes unenforceable and they are known as Void Contract. 

Agreements by or with person’s incompetent to contract 
Minor, Unsound mind and people barred by law are not competent to contract

Agreements entered into through a mutual mistake of fact between the parties.
In case of mutual mistake of fact there is lack of Consensus Ad Idem so a valid Agreement does not comes into existence

Agreement, the object or consideration of which is unlawful
Any agreement made for illegal consideration or objective cannot form a Valid Agreement.

Agreement made without consideration 
Agreements without consideration are void.

Agreement restraint of marriage 
Any agreement that puts a restrain on marriage of a person other than minor are void.

Agreements in restraint of trade 
Agreement that restrain a person to carry on a lawful profession or business is void. Though there are certain exceptions to this rule as well

Agreements in restraint of legal proceedings.
Any agreement that puts a restrain on legal proceeding are void. However parties may enter into arbitration agreement. 

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Wagering agreement 
Wagering agreement is an agreement entered between the parties where parties agree to pay money on monies worth on happening on an uncertain event. Neither party should have any control over the event. 

Impossible agreement 
Any Agreement that is legally or physically impossible are void. 

Agreement the meaning of which is uncertain
Agreement in which terms and conditions are not certain and are vague are void. 

Contingent contracts are those contracts whose performance is based on future and in case those events become impossible they are void. 

Section 31 of the The Indian Contract Act, 1872 defines contingent contract  as
A contingent contract is a contract to do or not to do something, if some event, collateral to such contract does or does not happen.

  • Performance of the contract must be dependent on a future event
  • Future event on which performance of contract is dependent should be collateral to the contract
  • Future event on which performance of contract is dependent should be uncertain.
  • Contingency can be dependent on the act of the third party however it should not be dependent on the parties in the contract. 

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