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Agreements Expressly Declared Void


Certain agreements have been expressly declared void by Indian contract Act, 1872.According to section 2(g) of Indian contract Act, 1872, “a void agreement is an agreement which is not enforceable by law”. Such an agreement does not give rise to any legal consequence and is void ab initio.
The following types of agreements have been expressly declared void under various sections of Indian contract Act, 1872:

1) Agreement the meaning of which is uncertain (section 29)

2) Agreements contingent on impossible events (section36)

3) Agreements to do impossible acts (section 56)

4) In case of reciprocal promises to do things legal and also other things illegal, the second set of reciprocal promises is a void agreement.

5) Agreements by or with person incompetent to contract (section 10 & 11)

6) Agreements made without consideration (section 25)

7) Agreements entered into through a mutual mistake of fact (section 20)

8) Agreements the consideration or object of which is unlawful (section 23)

9) Agreements the consideration or object of which is unlawful in part (section 24)

10) Agreements in restraint of marriage (section 26)

11) Agreements in restraint of trade (section 27)

12) Agreements in restraint of legal proceedings (section 28)

13) Agreements by way of wager (section 30)

Where the legal part of a contract can be separated from the illegal part, the illegal part may be rejected and the good one can be retained. But where the illegal part cannot be separated, the whole contract is void.

Agreement the meaning of which is uncertain (section 29)

Agreements the meaning of which is uncertain or incapable of being made certain, the agreement is valid.

Warning Agreement 

An agreement by way of wager is void. Wager is an agreement between two parties by which one promises to pay money on the happening of some uncertain event in consideration of the other 
party’s promise to pay if the event does not happen.

Essential elements of a Wagering Agreement:

There should be promise to pay money or money’s worth by both the parties to the agreement.

The agreement must be based on an uncertain event.

Both the parties must have equal change to either win or lose. The parties should have no control over the event.

Neither party should have interest in the happening or non-happening of the event other than the stake he will win or lose.

Speculative Transactions

Unlike, wagering agreements, speculative transactions are generally valid. Speculative transactions is one in which mutual intention of parties is to settle the transaction either by actual; delivery of goods or by payment of difference in price of settlement data.

However, if the mutual intention is only to settle the transaction by payment of difference in price on settlement data, the transactions would be wagering agreement and would be void.

 Wager and Collateral Transactions

A wagering agreement is void but not illegal, transactions incidental to wagering transactions are not void. Thus, a broker in a wagering transaction can recover his brokerage. (In Maharashtra and Gujarat wagering transactions are illegal whereas in other states these are void).

Examples of Wagering Agreements

Lottery, even through authorized by the government, is an agreement one by way of wager and an agreement to settle the difference between the contract price and the market price of certain goods on a particular settlement date.

Crossword puzzle in which prizes depends upon correspondence of competitor’s solution with previously prepared solution kept with the editor of the newspaper is a lottery.

Exceptions of Wagering Agreement

Transactions for the sale and purchases of stock and shares. However, there should be a clear intention to give and take delivery. Where the intention is only to settle the price difference, the transaction is a wager.


Prize competitions which are games of skill provided the prize money does not exceed Rs.1, 000.

An agreement to contribute a plate or prize of the value above Rs.500 to be awarded to the winner of the horse race.

Contracts of insurance

Suit to recovery money deposited: Money deposited with a third person to be paid to the winning party of the wager agreement, cannot be recovered by the winner. However, the loser can recover his deposit with the stakeholder. But where the stakeholder has already paid the money to winner, the loser cannot recover it from him.

Agreement Contingent on Impossible Events

Agreement to section 36 of the Indian Contract Act, 1872, “Contingent agreements to do or not to do anything, if an impossible event happens are void whether the impossibility of the event is known or not known to the parties to the agreements at the time when it is made”.

Agreement to Do Impossible Acts (Section 56)

According to section 56, “An agreement to do an impossible act is void”.


When a contract becomes void, the party who has received any benefit under it must restore it to the other party or must compensate the other party by the value of the benefit. This restoration of th4e benefit is called ‘restitution’. The principle of restitution is that a person who has been unjustly enriched at the expenses of another is required to make restitution to that other.

The principle of restitution also applies where the contract becomes voidable. In case of voidable contract, if the party rescinds the contract, he shall restore any benefit he has obtained under the contract from the other party.



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