Monday, October 08, 2007

Contract Act_Practical Problems_11

The lessor let out his premises to the lessee on a fixed rent. The deed recited that "if the company did not vacate the premises by a specific date, the company shall commence paying the then prevalent market rent." Does this provision in the lease deed make the contract void for uncertainty?

Yes- such an agreement shall be void as per Section 29 of the Indian Contract Act being uncertain in terms of the rent payable. The expression 'market rent' lends uncertainty to the amount of rent chargeable since rent might vary from location to location, premises to premises. Hence the clause in the lease deed suggesting payment of rent at market rate shall be void and unenforceable.

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