all innocent promises collatral to the main illegal promise contained in the contract will be regarded as?
pls ans & explain
in scanner they gve the ans as valid is tis correct?
4 Replies
divyalakshmi
(student)
(153 Points)
Replied 14 December 2012
even in illegal contracts the collatral promises are valid.. for example if A borrows money 4m B to do any illegal business.. but ultimately the debt to b is valid.. i hope tiz clarifies ur doubt...
harish ragav
(student-IPCC)
(407 Points)
Replied 15 December 2012
but the main contract is illegal and its collateral contract is also void na?
for eg, x borrow money from y to do illegal business......it is also void....
Arul Pradeep
(Student CA CPT )
(22 Points)
Replied 15 December 2012
if any legal contract is collateral to a illegal contract, it becoms viod........
but if any illegal contract is collateral to legal contract, the collateral contract becomes void but main contract is valid............understood?
AASHISH SACHDEV
(-)
(400 Points)
Replied 15 December 2012
since the main contract is void, the promise collateral to the contract also becomes void...
for eg...A and B agree to do smuggling business. collateral to this they decide that they will share the profits and losses equally.
in this case the collateral agreement to share profits becomes void as the profit is derived from illegal sources.
it will be void.
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