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"All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void."
Essential elements of valid formation and doctrine of frustration under Section 56.
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Section 10 — What agreements are contracts
All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.
Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.
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"Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. [Footnote 1]"
"Exception 1: One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein..."
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Satyabrata Ghose v. Mugneeram Bangur & Co.
The Supreme Court held that Section 56 of the Contract Act lays down a positive rule of frustration and does not leave the matter to English common law doctrines.
Niranjan Shankar Golikari v. Century Spg. & Mfg. Co. Ltd.
Negative covenants operating during the term of employment are valid and not in restraint of trade under Section 27 unless shown to be unconscionable.
Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan & Anr.
The rule against restraint of trade is absolute in India; any restrictive covenant operating post-contractual expiration is void under Section 27.
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The Indian Contract Act, 1872 — Section 10
"What agreements are contracts: Free consent, lawful consideration & capacity"
Valid contract formation & scope of frustration
Offer and acceptance over telephone & telex
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The Indian Contract Act, 1872 • Chapter II (Free Consent & Lawful Consideration)
1954 SCR 310 • Supreme Court of India • Doctrine of Frustration under Section 56
Central Act No. 09 of 1872 • 238 Sections across 11 Chapters
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