Regarding unilateral Agreement - Void or Valid
Pramod Kumar
(Querist) 25 July 2009
This query is : Resolved
Dear Members,
Seek your opinion on the following below facts that is quite interesting.
"A" and "B" enter into an agreement to do a business, the agreement was drafted by "A" and all the clauses were in favor of "A" can be said as unilateral agreeement.
There is a clause in the agreement which says "A" can terminate the agreement with "B" anytime after giving one month notice in writing and WITHOUT CITING ANY REASONS.
1. There is no consensus ad idem as per the essential ingredients of the Contract Act. Since "B" had no other option to do business he signed and is currently doing business.
2. Now "A" is threatening to terminate the agreement.
My question is here
1. Can such a unilateral agreement be changelleged on the ground of consensus ad ideam and protect the interest of "B" from being terminated.
2. Is there any other way to save "B" from being terminated arbitrarily.
Regard,
Pramod
Khaleel Ahmed Mohammed
(Expert) 25 July 2009
Yes as per the terms of agreement A can terminate the agreement without citing reason,provided one month notice should be given.
There is no valid ground to challenge the agreement in the court.Such challenge will not be yielded fruitful.
PALNITKAR V.V.
(Expert) 25 July 2009
Nobody compelled B to sign such a unilateral agreement. There is no question of consensus as such. When B signed the agreement, it implies that he agreed all the terms.
nagarajakapoor., 09885060620
(Expert) 26 July 2009
As my learned friends opined above, it is true that the agreement is valid, if tries to raise a question regarding validity under the terms of consensus ad idem it was not been treated as contractual agreement, then there is no case,so B when obiliged all the terms and enjoying the benefits from the agreement he cann't say that it is void. Only the remedy is he has to be noticed regarding termination well before within the reasonable time to close his business.
Pramod Kumar
(Querist) 26 July 2009
Dear Members,
I appreciate your prompt response on my query. I need to require few more clarifications on the said ground.
1. If "A" terminates the business, automatically the clients of "B" which he has acquired in due course becomes direct clients of "A". Thereby "B" will loose reputation and integrity in the market and among the clients he has earned through his service.
2. Is there any ground on which such unilateral agreements can be challenged becoz as there was no compulsion on the part of "B" to sign it but for doing business with "A" there was no other way other than to sign the agreement as it is.
So will this not amount to any compulsion or indirect influence.
How to save "B" from termination and challenge the same.
Any light path way could guide me in solving this issue.
regards,
Pramod
J K Agrawal
(Expert) 26 July 2009
Initially i have to say that B have no option as the contract is valid in all respect and A can do every thing under the contract how hard it may be to B.
But I understand your problem. So many times one is bound to agree upon each and every term of a person. It happens to every body who take loan from a bank (he has to sign even blank papers and loan acknowledgments without date in advance even if he may be an advocate ) When we open a simple bank account, D Mat account or even take an mobile connection, we have to sigh the terms and conditions of the service provider how coursive those may be.
Your case is the same and you will find some way under chapter of 'guarantee' in contract act. Banks and vehicle financer do this type of practice everyday.
Y V Vishweshwar Rao
(Expert) 28 July 2009
I agree with Mr agarwal ! the agreement is to be treated as singed by party with out actually knowing the terms of the agreement which are against the interest of such party ! The same defers from case to case .
