Legal Question in Business Law in Pakistan

Re: busniss law

Dear Nasir

Perhaps, you want to know about Void Contracts. Please bear in mind contracts can be void or voidable.

All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Since you want to know about void contracts, below is the answer to your question.

Pursuant to Section 24 of the Contract Act of Pakistan, "If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void".

Section 25 declares an agreement made without consideration is also void.unless:-

(1) It is expressed in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless;

(2) or is a promis to compensate for something done; it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do, or unless.

(3) or is a promise to pay a debt barred by limitation law; it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.

In any of the above cases, such an agreement is a contract.

Re: busniss law

Void contract is that which is not enforceable at law. There are two categories of void contracts Ab initio: Those that are void right from the time of formation or by the change of law of government and Void-able Contracts which have option to void. All contracts in which consent of a party are not free. Void contracts are those that are bastered since their birth while void-able contracts are those, which can be, proven bastered after they are born.

Contracts without consideration u/s 25 are void, but where benefit or interest of the principal debtor is sufficient consideration on the part of surety, for the purpose of guarantee.

Agreements lacking following things are void:---

1. Free consents.

2. Purpose is lawful.

3. Lawful consideration.

4. Competent of contract. Who is not competent? All are competent except Minor, Unsound Mind, and Disqualified by the law. Insolvent or Bankrupt are deprived by the law to form contract.

Re: busniss law

is no contract. For instance, A promise to give Rs. 100/- to B, without consideration other than natural affection, is a void contract.

3. Restraint of Marriage: Everyone has liberty of marriage with his own option except minor. If any contract restrains anybody who is major, from marriage, is void contract.

4. Restraint of Trade: Restriction on any lawful business, profession, or trade is void except where the goodwill has been sold. He can be refrained to carry on the similar business within special local limit.

5. Restrain of Legal Proceedings: Everyone has right of legal proceedings upon dispute in the Court of law. But there is an exception. If dispute arises, then they will be bound before going to Court, to decide by way of arbitration. Decision by way of arbitration is called award. When it comes to the rule of Court, then it is enforced.

6. Uncertain Agreements: All the agreements meaning of which are not certain, are void. Example: A agrees to sell B, 100 tons oil. This agreement is void on the ground of uncertainty because kind of oil is not specified. But if A has only one kind of oil for which he is popular, then there is no uncertainty to make the agreement void.

7. Agreement by Way of Wager: It means contract by A to pay money B on the happening of a given event, in consideration of B paying to him money on the even not happening. A promise to give money or money�s worth upon the determination of an uncertain event.

8. Agreement to do impossible act: It is itself void. Agreement of magic is void.

9. Contract to be married become void when one of them becomes mad. Contract of second marriage where polygamy is forbidden is void. Trade with the country against, which war has been declared, is void.

10. Contrary reciprocal contract: All contracts which have promise, one set of which is legal, and other one is illegal is void. For instance, A agrees to sell to B and a car against an amount of Rs. 50,000/- and 1 kilogram heroin. Set of first contract is valid but second one is void.

Re: busniss law

11. Alternative promise, one branch being illegal: Promise in which one branch is legal and other one is illegal, the legal branch can be enforced. Example, A agrees to deliver to B for Rs. 50,000/- either wheat or wine. First branch of this contract can be enforced while second one is void.

12. If there is provision in contract that promisor will provide facilities for the execution of contract to promisor, contract will become void upon refusal of such facilities. If, for the purpose of whitewash, promisor fails to provide ladder and brushes to promisee, under the provisions of the contract, contract will become void. Promisee may claim damages against the breach of contract.

13. If time is essential as per contract then other party is at liberty to get the contract revoked and can claim damages and if time factor is not important then other party cannot repeal the contract and cannot claim damages.

For example, A agrees to B for the supply of 100 Books on February 01, 2000, and he fails to do so. It now on B to claim damages or compels A to perform the contract. It does not matter that the price of the books have been increased or decreased.

14. Obligation of a person, who has received advantage under void agreement or contract, that becomes void. For instance, Ali pays to Zahid Rs. 100,000/-, in consideration of Zahid�s promising to marry Najma, Ali�s daughter. Najma died at the time of promise. The agreement is void, and Zahid is bound to repay Rs. 100,000/- to Ali.

15. Collateral agreements are those which are related to others. For example, A makes an agreement with B for the construction of a home without mentioning the mode of payment. A makes another agreement stating as to how the payment of the work done in first agreement will be made. This agreement is called collateral agreement. This is dependent agreement. This agreement is also void if the principal agreement is void. Past collateral agreement are those fact of which for both parties is uncertain. Receiving of the amount of the agreement made by way of wager is void. Legal representative, guardian, executor, successor are not liable for the compliance of the agreement having nature of wager. It will be void. Where there is no right and obligations are created, there is no liability. All the agreements that are ab initio, are void right from that time/formation. Ab initio are those which become void by an act of God or State.

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Re: busniss law

I don't know the term "vaid" in law. Explain "vaid" enabling me to reply query.