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CONTRACT LAW I NOTES, Study notes of Contract Law

National law UniversityContract Law

IT CONTAINS CASE LAWS UNDER DIFFERENT SECTIONS AND EXPLANATION OF DIFFERENT SECTIONS

Typology: Study notes

2020/2021

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CONTRACT LAW I
Essentials of a Valid Offer
-INTENTION to do or abstain from doing something and with a view to obtain the
assent of the other party- “contractual obligations” – Balfour v. Balfour
- Intention is to be determined from the terms of the agreement and the surrounding
circumstances.
- BALFOUR v. BALFOUR: Appeal from the judgement of Justice Sargant who said
that there existed a valid contract between the husband and wife where the acceptance
of the wife was the supposed consideration.
The husband appealed to the decision in the court of appeal. Lord Atkin decided that
there was no concluded contract between the two parties as there was no intention to
enter into legal obligations. The agreement between parties while they were
temporarily staying apart does not give rise to contractual obligations. Further there
was no consideration for the promise by the wife. The agreement was termed as
purely domestic agreement.
The counsel for the respondent pleaded that when the husband and wife are mutually
separated, the husband is bound to pay the wife the sum agreed as maintenance. The
pleading was rejected as this was not a case of matrimonial separation.
- MERRITT V. MERRITT: Appeal from the decision of J. stamp who held that there
exists a valid contract between the husband and wife.
In the court of appeal, Lord denning and other justices held that there was a contract
concluded between the husband and wife as there was intention to enter into legal
obligations evident from the fact that they had separated. Therefore the principle of
Balfour v. Balfour does not apply. The appellant argued that there was no
consideration from the wife, but in fact the wife had agreed to pay the mortgage
remittances using the monthly payment of 40 euros and partly from her own money.
- GOULD V. GOULD: Husband and wife decided to live separately, the husband
offered to pay 15 pounds per week till he is able to. The husband failed to pay the
amount. Wife sued and the contract was said to be a concluded contract. The husband
appealed which was allowed. It was decided that even when there was a written
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CONTRACT LAW I

Essentials of a Valid Offer

  • INTENTION to do or abstain from doing something and with a view to obtain the assent of the other party- “contractual obligations” – Balfour v. Balfour
  • Intention is to be determined from the terms of the agreement and the surrounding circumstances.
  • BALFOUR v. BALFOUR: Appeal from the judgement of Justice Sargant who said that there existed a valid contract between the husband and wife where the acceptance of the wife was the supposed consideration. The husband appealed to the decision in the court of appeal. Lord Atkin decided that there was no concluded contract between the two parties as there was no intention to enter into legal obligations. The agreement between parties while they were temporarily staying apart does not give rise to contractual obligations. Further there was no consideration for the promise by the wife. The agreement was termed as purely domestic agreement. The counsel for the respondent pleaded that when the husband and wife are mutually separated, the husband is bound to pay the wife the sum agreed as maintenance. The pleading was rejected as this was not a case of matrimonial separation.
  • MERRITT V. MERRITT: Appeal from the decision of J. stamp who held that there exists a valid contract between the husband and wife. In the court of appeal, Lord denning and other justices held that there was a contract concluded between the husband and wife as there was intention to enter into legal obligations evident from the fact that they had separated. Therefore the principle of Balfour v. Balfour does not apply. The appellant argued that there was no consideration from the wife, but in fact the wife had agreed to pay the mortgage remittances using the monthly payment of 40 euros and partly from her own money.
  • GOULD V. GOULD: Husband and wife decided to live separately, the husband offered to pay 15 pounds per week till he is able to. The husband failed to pay the amount. Wife sued and the contract was said to be a concluded contract. The husband appealed which was allowed. It was decided that even when there was a written

agreement, consideration and they were lively separately, the intention to enter into legal obligations was absent as evident from the uncertain terms.

  • Terms should be clear and certain
  • Communication (explicit or implicit) – Lalman Shukla V. Gauri Dutt ( there has to be communication of the offer itself for the acceptance to take place) Essentials of a valid acceptance
  • Absolute and unqualified
  • Communication – also in the prescribed form if any by the offeror
  • Acceptance should be made to the offeror or his/her authorised agent.
  • The acceptance should be made only till when it is subsisting.
  • Usual and reasonable time Invitation to Offer and Offer
  • Making of an offer is the expression of the final willingness of the offeror to enter into a contract and with a view to obtain the assent of other person.
  • While the invitation to offer is not the expression of final willingness but in fact just a way of expressing that one is willing to invite offers and further negotiate.
  • Harvey v. Facey- bumper hall pen case- only quoted the price and there was no communication of his final willingness to sell the pen. Answered only one of the two questions.
  • Col. D.I Macpherson v. M.N Apanna – the plaintiff made an offer to buy the defendant’s lodge for 6000Rs. He wrote to the defendant’s agent asking if his offer has been accepted and he was ready to give another price if found reasonable. The defendant’s agent wrote, ‘will not accept anything less than Rs. 10,000. The plaintiff accepted to pay the amount. Later defendant refused to sell. Could do that as the defendant merely made an invitation to offer and was inviting offers for negotiation.
  • Bus stand example – the offer is made by the bus driver or the conductor which is accepted by the passengers when they board and pay for the ticket. (important) Communication of acceptance and the place of contract
  • Bhagwandas Goverdhandas Kedia v. Girdgarilal Purshottam Das: Kedia (Khamgaon) had to supply cotton seed cake to M/S Girdharilal Purshottam (Ahmedabad). The acceptance was received at Ahmedabad and thus the place of contract is Ahmedabad
  • Lawful object would mean that the purpose behind entering the contract and the act essential to the contract is itself lawful. Therefore giving cash to kill another person will not be termed as lawful object but a lawful consideration. Express and Implied offers
  • An offer which is expressed by conduct is known as implied offer while an offer expressed by words, spoken or written is known as express offer.
  • Similarly for the acceptance.
  • S.9 defines express and implied promises.
  • Implied offer- case law- Upton-on-Severn RDC v Powell( fire brigade called, area turned out to be out of the free service zone of Upton, the act that he called for the services of Upton implied that he intended to pay for their services too ) Standard form of contract
  • Necessity? Unreasonable
  • Giving reasonable notice – S. 3, Indian Contract Act, 1872
  • Terms should be reasonable Battle of forms in commercial contracts Q- Law of contract can vary according to the nature of economy? – Extent of freedom of contract CONSIDERATION
  • Intention can be implied from consideration Essentials of Consideration
  • “At the desire of the promisor ”- intention to enter into contractual obligations and to obtain the assent of the other party???- Durga Prasad v. Baldeo
  • Kedarnath v. Gourie Mohamed (1866)-Cal HC - town hall construction- breach of promise- consideration – when at the desire of the promisor, the promise does something, it amounts to consideration. (one subscriber backed out and did not contribute the 100 RS. He had promised to pay for the town hall construction)- Indian law is different from the English common law – Hudson case. Gratuitous promises are enforceable.
  • Flow from promise to promisor - demand from the promisor which shall be expressed. (Implies that voluntary act/ statutory duty/ not a social obligation/ tortious obligation/out of natural love and affection)
  • Commission or abstinence of an act (consideration may be executed or executionary) - Lawful
  • The act or abstinence shall be done by the promise or any other person ( designation of this person?) – trust, family. “AT THE DESIRE OF THE PROMISOR” Promissory Estoppel- related to consideration-subscription cases- “in light of justice and equity”- relying on the promise, when someone starts acting on it and alters one’s position, it will be case a promissory estoppel- as there in an alteration in the person’s position on the basis of the promise which was made.
  • Durga Prasad v. Baldeo (also agreement without consideration) The plaintiff, on the order of the Collector of a town, built at his own expense, certain shops in a bazaar named Hume Ganj. The shops were occupied by the defendants who in consideration of the plaintiff’s money expended to make the bazaar, promised to pay him a commission on articles sold through their agency in the bazaar. The plaintiff’s action to recover the amount was dismissed because his act of expending money for the construction of the bazar was not at the desire of the promise (defendant) in the case. the act was a result of the collector’s order. - Motilal Padampat Sugar mills v. State of UP In this case the Chief Secretary of the Government gave a categorical assurance that total exemption from sales tax would be given for three years to all new industrial units in order them to establish themselves firmly. Acting on this assurance the appellant sugar mills set up a hydrogenation plant by raising a huge loan. Subsequently, the Government changed its policy and announced that sales tax exemption will be given at varying rates over three years. The appellant contended that they set up the plant and raised huge loans only due to the assurance given by the Government. The Supreme Court held that the Government was bound by its promise and was liable to exempt the appellants from sales tax for a period of three years

The English law also identifies exceptions to this doctrine of privity

  • When the contract implies a trust in favour of the third party
  • Where money to be paid in the contract is charged on some immovable property.
  • Cases of marriage settlement or compromise of doubtful rights as introduced by Special relief act.
  • Krishna Lal Sandhu v. Pramila Bala AIR 1928 Cal 518 – doctrine prevails with exceptions .It was held that an obligation in equity amounts to trust in favour of nominee, privity of contract can be breached. Otherwise, no third party intervention. Behari Lal Sircar insured his life for Rs. 500 issued by the Hindusthan Co-operative Insurance Society. The society assured that upon the death of insured, the society shall pay to Pramila Dassi. The plaintiff’s claim to the money was disregarded which resulted in the suit. The court of first instance held that the insurance money became the property of the plaintiff on the death of deceased and did not form part of the assets of the estate left by him. The plaintiff contented that the Married Women’s Property Act of 1874 applies and thus creates trust in the favour of the plaintiff. According to the English law, no third person can sue in a contract. There are two exceptions to this. One, trust is created in favour of the third party. And second is the case of a children in the marriage settlement where persons in contemplation of a marriage make a settlement by way of contract only for the benefit of children of the marriage. But this court reversed the judgement of the court of first instance and the lower appellate court and stated that no trust was created in favour of the plaintiff, Married Women’s property act of 1874 is not applicable and thus the insured money formed part of the assets of the estate left by the deceased. - Dunlop Pneumatic Tyres & co. v. Selfridge &Co. (1915) AC 847 D unlop tyres was a tyre manufacturer and entered into a contract with their dealer to not sell their goods below the RRP. As part of the agreement, Dunlop also required their dealers to gain the same agreement with their retailers, who in this instance was Selfridge. The agreement held that if tires were sold below the RRP, they would be required to pay £5 per tire in damages to Dunlop. This was agreed between the dealer

and Selfridges, which effectively made Dunlop a third-party to that agreement. Sometime after this, Selfridge sold the tires below the agreed price and Dunlop sued for damages and an injunction to prevent them from continuing this activity. At the initial trial, the decision was given to Dunlop. This was appealed by Selfridge and the decision was reversed. Dunlop appealed. The issue was whether Dunlop had access to contractual damages without being a party to the contract? Dew was not acting as an agent of Dunlop and thus not under exception. D The court held that Dunlop was not a party to the contract, doctrine of privity applies and also that there was no flow of consideration from Dunlop to Selfridge.

  • MC Chacko v. State Bank Of Travancore (1969) 2 SCC 343- Privity of contract It was held that kottayam bank is not a party to the contract and has not even declared itself as the beneficiary, thus cannot sue. The Supreme Court has by its decision in M.C. Chacko v State of Travancore [7] expressed itself in favour of the rule in Tweedle v Atkinson thus clearing the ambiguities in the application of the doctrine of Privity of Contract. There are two aspects of this doctrine. Firstly, no one but the parties to the contract are entitled under it. Rights or benefits may be conferred upon a third party but such a third party can neither sue under the contract nor rely on defenses based on the contract. The second aspect is that the parties to a contract cannot impose liabilities on a third party. STATUTORY EXCEPTIONS
  • S. 15, Specific relief act- exceptions to doctrine of privity- who may obtain specific performance
  • Statutory exceptions in Negotiable Instruments Act COMMON LAW
  • Beneficiary to subject matter- third party
  • Family arrangement
  • Covenants related to land

no claim for a maintenance as it has been held in a precedent that if a wife leaves the house due to ordinary quarrels and there is no violence as in this case, no claim for maintenance shall be entertained. No consideration- no valid contract. Nearness of relation alone does not necessarily imply natural love and affection. SECTION 12- SOUND MIND FOR PURPOSE OF CONTRACTING hn

  • Determination of who is of sound mind- whether the person is capable of understanding it and forming a rational judgement as to its effect on his interests,
  • Insanity- a mental medical condition, and not circumstantial - Chacko and another v. Mahadevan Chacko had 20 cents of land of which he sent one cent of land for Rs. 18000. Then a few months later, he sold 3 cents of land to Mahadevan for Rs. 1000. Later Chacko and his wife filed a suit challenging the agreement on the grounds that it was made under the impression of fraud which makes it null and void. In the fact findings of the first appellate court, it has been established that he was not of sound mind when this agreement was made as he was in the hospital for alcoholic psychosis. Further it is material that while he sold one cent for 18000, no man of sound mind would sell 3 cents for 1000 rupees. Therefore Chacko was held to be of unsound mind when he entered into this agreement. S.25 explanation 2 - Sonalal Bora v. Jyotindra Bhattacharjee The court held that the proof of unsoundness of mind shall not be given medically but also through conduct. The burden of proof lies first on the person filing a plea for unsoundness of mind, once proved even by balance of probabilities, the onus shifts on the other party to show that there was a rational explanation to the conduct. Bhagirath Bora who transferred his home property in the name of plaintiff. The wife and sons of Mr. Bora contented that he was of unsound mind as evident from his erroneous conduct of instating criminal proceedings against his own family members, he was thus held to be of unsound mind while entering into the agreement.

MAJORITY AS A REQUIREMENT (SECTION 11)

  • Age of majority act- person who is domicile of India attains majority when turns 18.
  • In the case were the guardian or a custodian is appointed by any court of justice for a minor in case of a person or his property or for both before the age of 18 years, then in such a case the age of majority would be after attaining the age of 21 years instead of attaining 18 years of age.
  • English law considered minor contracts as voidable- and Indian law is based on English law, controversy whether it should be void or voidable.-culminated in MOHORI BIBEE AND ORS. V. DHURMODAS GHOSE
  • Minor’s contract in India is void as laid down in Mohori Bibee
  • Equity at times calls for liabilities for parties to follow certain obligations under the contract.
  • Is Mohori Bibee law unfair to the minors?
  • Facts: a minor, owner of some property by inheritance, he wanted some amount of 20,000 and thus contacted a lawyer to get that money on mortgage. Deed concluded by the lawyer as he found the person willing to give money. Minor attempted to escape from all form of liabilities i.e. did not wish to give money and the property both, wanted to get the deed cancelled.
  • Contentions by the plaintiff – contract with a minor is voidable, not void. s.64, 65, ICA, 1872 and S. 38, 41, Specific Relief Act. The court believed that the application of these provisions requires the formation of the contract, so in case of void contracts these provisions will not stand.
  • S.115, Indian Evidence Act- ESTOPPEL – the minor represented himself as major. CAN THE CONTRACT BE ENDERED VALID ON THE BASIS OF THE FACT THAT THE MINOR MISREPRESENTED HIMSELF AS A MAJOR? CAN THE MINOR BE ESTOPPED ON THE BASIS OF S.115, Indian Evidence Act?
  • Can a minor plead infacy to escape contractual obligations? Can minor be estopped from pleading infacy – the answer is no, liability cannot be imposed on minor when the law does not allow minors to enter into contract.
  • Kedarnath, the lawyer for the plaintiff and who conducted the intial deed. It was proved that Kedarnath was aware of the minority of the person. Thus, equity is not in their favour and thus S. 64,65 and S. 41 would not be applied
  • Equitable remedies are discretionary remedies whereas legal remedies are provided by law itself.

SECTION 13- CONSENT DEFINED- related to the existence of the contract.

  • Parties should agree upon the same thing in the same sense.
  • If the parties do not agree on the same thing in the same sense- no contract existed.
  • But if this mistake as to understanding the object of the contract is caused by the fault of the other party, it may not invalidate the consent. For example – case of a sale by sample where the vendor by mistake shows a wrong sample, it was held that the contract was not avoided by this error of the vendor.
  • ‘same thing’ relates to the object of the contract.
  • DIFFERENCE BETWEEN MUTUAL MISTAKE AND COMMON MISTAKE
  • MUTUAL MISTAKE- no consensus ad idem, parties misunderstand each other and are at cross-purposes, no agreement at all, this contract is void ab initio.
  • COMMON MISTAKE- parties are ad idem, a mistake which is shared alike by both the parties, section-20, for example- the subject matter of the contract has perished and none of the parties are aware of it. Renders a contract void.
  • In case of UNILATERAL mistake – the contract is voidable at the option of the psrty mistaken under s.18(3)
  • Real consent is essential to the formation of the contract- situations where the real consent is absent include;- - Offer and acceptance do not coincide - Mistake as to the identity of the person contracted with. - Mistake as to the nature of transaction- Non est Factum- the defendant was mistaken about the character of the agreement when signing it. SECTION 14 (FREE CONSENT DEFINED)
  • free consent is required by s. 10, consent but not free causes the contract voidable, generally.
  • Mutual mistake- void
  • ‘caused the consent’- even if there is undue influence or coercion, but if it does not appear that it was instrumental in making the promisor to do the act in question, the existence of coercion etc. would be of no avail, has to be the proximate and immediate cause of that effect

SECTION 15 (COERCION)

- INGREDIENTS

- Committing or threatening to commit an act forbidden by IPC - Or unlawful detaining or threatening to detain property - “prejudice of any other person”

  • With the intention to have the other person enter the agreement
  • It is wide in its scope- includes unlawful detention of property, may be committed by any person not necessarily party to the contract, may be directed against any person. SECTION 16 ( UNDUE INFLUENCE)
  • INGREDIENTS- One of the parties is in a position to dominate the will of another, intention to get unfair advantage, relationship “subsisting” between the parties i.e during the period under consideration.
  • Raghunath Prasad v Sarju Prasad AIR 1923 PC 279
  • Unconscionability is in itself not enough to render a contract void or voidable
  • 16(3) –the plaintiff is required to prove that the defendant is in a position to dominate the will and it is unconscionable – shifts the burden on the defendant
  • The person influenced is constrained to do against his will that, which , but for the influence he would have refused to do if left to exercise his own judgement. (test)
  • Based on the doctrine of equity – “influence is acquired and abused and confidence is repose”
  • This doctrine as a defence applies to gifts as well as to transactions in the form of contract.
  • SECTION 16(1) – Two things have to be determined- are the relations between the two parties such that one is in a position to dominate the will of other and that has the party in such a position used his position to obtain unfair advantage over other.
  • Dominating relationship - which develop a dominating influence, need not necessarily be related by blood, marriage or adoption. – that generates a dominating position for one,
  • USE OF THE POSITION - the dominating position must be used too.
  • UNFAIR ADVANTAGE – bargain is in favour of the influencer and unfair to other.

SECTION 17 (FRAUD)

  • Difference between fraud and misrepresentation – in both cases a misstatement of fact which misleads the promisor, but in case of misrepresentation, the person believes it to be true and in fraud, he knows that suggestion as to the fact is not true. ( falsehood and not falsehood )
  • CLAUSE 1- there should be suggestion as to the fact, the fact suggested should not be true, should be made by person who does not believe It to be true, with an intention to deceive or induce
  • “ who does not believe it to be true ”- there is false representation when done knowingly, or without belief in its truth, recklessly careless whether it is true or false.
  • PROOF OF ABSENCE OF ACTUAL AND HONEST BELIEF IS ALL REQUIRED TO SATISFY EXISTENCE OF FRAUD
  • CLAUSE 2- “Active concealment” – mere non-disclosure of some immaterial facts does not constitute it.
  • CLAUSE 3- has to be shown that the promisor had no intention of making the promise while making it, and any subsequent conduct or representation is not considered for this purpose.
  • CLAUSE 4 – “Any other act fitted to deceive”
  • CLAUSE 5 – cases where disclosure of certain kinds of facts is expressly required by law, and thus expressly declared to be fraud
  • SILENCE AS FRAUD - mere silence not fraud unless
    • There is duty to speak- the principle is that every duty does not have a duty to disclose based on the reasoning that each party is expected to obtain some necessary information on their own, and not rely on the other party for everything.
    • Or, it is equivalent to speech
  • Burden of proof lies on the party alleging fraud. Again, the burden of proving silence in some circumstances amounts to fraud lies on the party alleging it,
  • INGREDIENTS OF FRAUD
    • there should be suggestion as to attract
  • The fact suggested should not be true.
  • The suggestion should be made by a person who does not believe it to be true.
  • The suggestion should be made with intent either to deceive or to induce the other party to enter into contract.
  • Representing belief as truth amounts to misrepresentation- without intention,
  • 17(1) – the person should know that the statement is untrue.
  • 17(2) – “active concealment” – the times when I am duty bound to speak but does not, and even when silence communicates something.
  • 17(4) – any act fitted to deceive – along with initial essentials
  • EXPLANATION – where there is a duty needs to be identified, is related to what constitutes an active concealment
  • It is settled that where a person on whom fraud is committed is in a position to discover the truth by due diligence, fraud is not proved.^1
  • SECTION 18- MISREPRESENTATION
  • “Believes it to be true.”
  • Without an intention to deceive
  • Causing a party to an agreement to make a mistake as to the substance of the contract
  • innocently SECTION 23
  • Imposes restriction on the absolute freedom of a person to contract as it becomes subject to the overriding considerations of public policy
  • Section 23 is confined to the object of the transaction or consideration and not to the reason or motive that prompted it.
  • FORBIDDEN BY LAW
  • Prohibiting any statute, enactment of the legislature or a principle of unwritten law
  • Gherulal parakh states in India, acts punishable by IPC, acts prohibited by special legislation or oders by authorities deriving authority from the legislature would come under forbidden by law
  • ‘FORBIDDEN BY LAW’ AND ‘VOID’ (^1) Sri krishan v The kurukshetra University
  • The question is that of legality of partnership to carry on business in wagering agreements
  • FACTS- Plaintiff and defendant entered into Partnership agreement with object of entering into wagering transactions with obligation to bear equal loss or profit arising out of such partnership. When plaintiff asked for reimbursement of half of money paid by him to discharge losses of partnership, defendant alleged that the agreement made between them was illegal and unenforceable on account of S.
  • CENTRAL INLAND V. BROJO NATH GANGULY
  • Plaintiffs worked in a company which was dissolved by Court’s order and they were then inducted into defendant Corporation upon latter’s T&C. After years of serving Corporation, plaintiffs were arbitrarily kicked out of the Corporation by virtue of Rule 9(i) of said T&C which provided for termination of employees’ services on three months’ notice on either side upon which three months’ salary to be paid by Corporation. Plaintiffs requested Court to quash Rule 9(i) on grounds of unconscionability.
  • ISSUE: Whether an unconscionable term can be held to be void/ voidable under Indian Contract Act (ICA)?
  • Freedom of contract is of little value when parties don’t stand on equal footing; party with weaker bargaining power enjoys no realistic opportunity to bargain and party has no alternative between accepting a set of terms proposed by other or doing without the goods or services offered.
  • Unconscionable agreements - Only when there is gross inequality of bargaining power compounded with terms unreasonably favourable to stronger party can the indication that weaker party had no meaningful choice except to consent to the unfair and unreasonable terms, hold ground.
  • There is gross inequality of bargaining power and the party does not have any meaningful choice – two considerations by which court strikes the agreement under s.23- opposed to public policy as they affect large section of public (adhesion contracts)
  • Rule 9(i) was unreasonable and unfair to the extent of being unconscionable for it gave arbitrary and absolute power to the Corporation to dismiss its employees without providing any guidelines to that effec t. The rule was

also violation of principle of natural justice-audi alteram partem-for it neither provided for any inquiry to take place nor did it provide for any opportunity to accused employee to be heard. SECTION 27, AGREEMENTS IN RESTRAINT OF TRADE ARE VOID

  • Relationship between S.27 and Art. 19, Indian Constitution – article 19 guarantees freedom of trade and in furtherance of the same, S.19 provides that such agreements are void. S.27 is a concrete expression of Art. 19
  • Can law of contract be seen as threat to freedom of trade? –
  • Can freedom of contract be used to prevent competition? –
  • Mere restraint will not be violation of article 19, the kind of restraint- unreasonable and absolute restraint.
  • WHAT IS UNREASONABLE RESTRAINT?
  • S.26 onwards is a restriction on a person’s freedom of contract
  • An attempt to balance freedom of contract with freedom of trade
  • NIRANJAN SHANKAR GOLIKARI V. CENTURY SPINNING AND MANUFACTURING CO. LTD. - The appellant was aware of the technical know-how, secrets, techniques and information related to the manufacture of tyre corn yarn - The inhibitions contained in clause 9 and 17 are not blanket restrictions, only invoked in matters of business( employee leaving abandoning, resigning his service during the term of and in breach of such agreement) - Clause 17 is a reasonable restriction to protect the interests of the respondent – restraint was applicable during the term of employment. Existence of a negative covenant in a service agreement made the agreement void on the ground that it was in restraint of trade and contrary to S.27 of ICA, 1872. - No indication that if the appellant was prevented from being employed in a similar capacity elsewhere he would be forced to idleness or that such a restraint would compel him to go back to the company - ONUS- in case of challenge on grounds of restraint of trade, the onus is on the party supporting the contract to show that the restraint is reasonable, then the onus shifts to party attacking the contract to prove that restraint is nevertheless injurious to public.