Multiple choice

‘P’ a wholesale dealer in sugar, sells sugar to ‘Q’ with a condition that ‘Q’ shall not sell the sugar beyond one kilometer of ‘P’s godown. The agreement is

  1. valid

  2. without free consent

  3. in restraint of trade and thus void

  4. on of ‘P’
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section 27 of the Indian Contract Act voids agreements that restrain trade. Limiting Q's sales to a 1km radius of P's godown is an unreasonable territorial restriction. Such restraints are void as they harm competition and public interest.

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