Void Contract
Discuss the grounds of void contract under Nepalese Contract Act by illustrating the cases.
Any contract which is not enforceable by law is said to be void. A void contract is one which has no legal effect whatsoever owing to the fact that a transaction which is void. Even if they satisfy some of the conditions of a valid contract, they are not enforceable. In the eye of law such contract is no contract at all. There are some contracts which have been declared as void by section 13 of Nepalese Contract Act 2056.
Section 13(a) mentions about contract in restraint of trade. The act says that a contract preventing anyone from engaging him/herself in a profession or trade which is not prohibited by prevailing law shall be void. This means any contract by which one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. provides a good example for this. Nordenfelt had a machine gun manufacturing business. He sold the business, Maxim Nordenfelt. He entered into a restrictive covenant by which he could not engage in the trade of manufacturing guns, explosives or ammunition or engage in any competing business for a period of 25 years. Nordenfelt later entered into an agreement with another gun company. From what is applied in this case, it seems that the restraint was reasonable in the interest of parties and in public interests. The contract was considered reasonable and valid. However, we now have reached a period when it may be said that science and invention have almost annihilated both time and space. Consequently there should no longer exist any cast-iron rule making void any agreement not to carry on a trade anywhere. The portion of his business which consisted of manufacturing guns and gunpowder explosives was one which would almost altogether be with Governments, foreign as well as at home, and wherever carried on would necessarily be in injurious
Any contract which is not enforceable by law is said to be void. A void contract is one which has no legal effect whatsoever owing to the fact that a transaction which is void. Even if they satisfy some of the conditions of a valid contract, they are not enforceable. In the eye of law such contract is no contract at all. There are some contracts which have been declared as void by section 13 of Nepalese Contract Act 2056.
Section 13(a) mentions about contract in restraint of trade. The act says that a contract preventing anyone from engaging him/herself in a profession or trade which is not prohibited by prevailing law shall be void. This means any contract by which one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. provides a good example for this. Nordenfelt had a machine gun manufacturing business. He sold the business, Maxim Nordenfelt. He entered into a restrictive covenant by which he could not engage in the trade of manufacturing guns, explosives or ammunition or engage in any competing business for a period of 25 years. Nordenfelt later entered into an agreement with another gun company. From what is applied in this case, it seems that the restraint was reasonable in the interest of parties and in public interests. The contract was considered reasonable and valid. However, we now have reached a period when it may be said that science and invention have almost annihilated both time and space. Consequently there should no longer exist any cast-iron rule making void any agreement not to carry on a trade anywhere. The portion of his business which consisted of manufacturing guns and gunpowder explosives was one which would almost altogether be with Governments, foreign as well as at home, and wherever carried on would necessarily be in injurious