Wednesday, March 17, 2010

Contract Act_Practical Problems_113

X and Y were two organizations trading in wheat of ‘Popular brand’ in Uttar Pradesh. X realizes that the wheat business is high yielding. To expand his business X offered Y a sum of Rupees ten lac on the condition that Y shall not sell ‘popular brand’ wheat in Uttar Pradesh. Accordingly Y stopped selling ‘popular brand’ wheat in Uttar Pradesh. X failed in making the promised payment to Y. Y filed a suit against X for the non-fulfillment of promise. Is the suit maintainable? Decide with reference to the provisions of the Indian Contract Act, 1872.