2. The undertaking is entitled to be compensable if, at the time of conclusion of the contract, the lessor is aware of the impossibility of performance (Article 56(3)). It is important to note that agreements that extend the limitation period prescribed by the Statute of Limitations are also void, not under this section, but under section 23, since the purpose is to circumvent the provisions of the Law (Rama Murthy vs Gopayya). (c) A contracts to marry B, to be already married to C and prohibited by the law to which he is subject from practicing polygamy. A must compensate B for the loss. (b) A agrees with B that she will marry only him. It is a valid marriage contract. In India, trade was in its fore and it is desirable to develop trade. Therefore, the strict provisions of Article 27 have expressly nullified any agreement that infringes on the right to trade. Public order required that every citizen should have the freedom to work for himself and that he should benefit from work for himself or for the State.
He should not enter into an agreement where by which he might not be able to use his skills or talents to his advantage or to the benefit of his country. If it does so by agreement, it is not permitted to do so. (a) A, after the sale of the goodwill of his business to B, promises not to operate similar operations “anywhere in the world”. Since the restriction is unreasonable, the agreement is inconclusive. However, if the buyer was free, in a similar agreement, to reject the goods (i.e. it was not required to accept the full quantity offered), it was found that the agreement was not concluded as a commercial commitment (Sheikh Kalu vs Ram Saran). A, who is only a coconut oil trader, agrees to sell “one hundred tons of oil” to B. A`s type of business gives an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred tons of coconut oil.
The impossibility of performing an act does not create an obligation for the parties. Section 56 of the Act invalidated such a contract. In this section, it is said that, of course, the loser can recover his deposit if he makes the request before the shareholder has paid it to the winner (Ratnakalli vs Vochalapu). But even such bail cannot be recovered by a loser in the states of Maharashtra and Gujarat where such an agreement is invalid and illegal. The context for the enactment of the Indian Contract (Amendment) Act 1996 can be briefly described as follows. Prior to this amending law, the insurance documents issued by the general insurance companies provided, without exception, that if a right is refused and an appeal is not lodged within three months of such a refusal, all the benefits of the policy expire. The words “to this extent”, which are contained in the provisions of article 27, are very important. These words illustrate the position of a situation in which the agreement can be divided into parts. If the contract can be divided into parties and some of these parties are not affected by the provisions of this section, i.e. they are not considered commercial, the contract on these parts is applicable. However, if the agreement is not divisible, the entire agreement is annulled.
Another exception to the rule of limiting trade restriction agreements is provided for in the Partnership Act of 1932. The law provides for three exceptions. These are: (a) A agrees to pay B Rs 1,000 (on loan) if two straight lines need to encircle a space. The agreement is not concluded. (b) A agrees to pay B Rs 1,000 (in the form of a loan) if B A`s daughter marries C. . .