Discuss the Grounds of Void Contract Under Nepalese Contract Act

Topics: Contract, Void, Contract law Pages: 3 (696 words) Published: July 25, 2011
Discuss the grounds of void contract under Nepalese contract act by illustrating the cases.

According to Nepalese Contract act 2056,” A contract is an agreement between two or more persons to do or not to do something, which can be enforceable by law.” The supreme court of Nepal has defined the contract as “an agreement of two or more parties with conditions.”

The word void means not binding in law. A contract which cannot be forced by both of the contracting parties is called a void contract. If a contract which comes to an end and which can be forcible by law becomes void when it cannot be protected by law. It is clear that a void contract is not void from the very beginning, i.e. a contract cannot be void ab initio. It is valid contract and binding on the parties when it is originally made but after its formation it becomes void due to certain reasons. According to the Nepalese contract act, Section 13, the following contracts shall be void: A. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd (1894), Thorsten Nordenfelt, a manufacturer specializing in armaments, had sold his business to Hiram Stevens Maxim. They had agreed that Nordenfelt ‘would not make guns or ammunition anywhere in the world, and would not compete with Maxim in any way for a period of 25 years’.

[section 13(a)] A Contract that prevents anyone from engaging him/herself in any occupation, profession or trade which is not prohibited by prevailing law.

Exceptions to Rule A
1. [Section 13 (a).(1)]A contract preventing the seller from engaging him/herself in a profession or trade at the time and place as mentioned in the contract concluded between the buyer and the seller on selling and buying of the goodwill of any trade. 2. [Section 13 (a).(2)]A contract concluded among partners in preventing their engagement in any trade or business, other than those of the partnership firm, similar to those of the partnership firm or any other trade or business together...
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