An agreement, which prevents a person from carrying a lawful business, is _______________.

void

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valid

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voidable

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contingent

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Solution

The correct option is A void
Section 27 of the Indian Contract Act, 1872 provides that an agreement by virtue of which a person is restrained from carrying out a lawful trade or profession is void to the extent of restraint. This exists with one exception where goodwill is sold and the seller of goodwill agrees to refrain from carrying on a similar business within the specified limits of the area where the buyer of goodwill will carry on the business, provided such limit is considered by the Court as reasonable.

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