To do or abstain from doing in OFFER

When A extends an offer to B and B accepts the offer, the offer becomes a
promise and A will be the promisor and B will become promisee.
It is not necessary that A and B have agreed to do something positive in
nature. It can be that A or B are expected to not to do something. The
consideration in this case will be against not doing something.
For e.g. A extends an offer to B to not to file a lawsuit against him, for
which he will pay B a sum of Rs 50,000. Here the consideration for B is Rs
50K for abstaining from filing the lawsuit.
According to Section 2(d) of the Indian ​Contract​ Act, 1872, consideration is defined as
follows: “When at the desire of the promisor, the promisee or any other person has done
or abstained from doing, or does or abstains from doing, or promises to do or abstain
from doing something, such act or abstinence is called a consideration for the
promisee.” This is a complex ​sentence​. Let’s break it down for further understanding
and rewrite it as follows:

At the desire of the promisor if the promisee either

● Does something (in the past, present or future) OR

● Abstains from doing something (in the past, present or future)

Then, this act of doing or abstinence is called Consideration. Now, it has two aspects,
either doing some act or abstaining from doing something. Let’s look at some examples:

Example 1 – Doing something

Raj and Harsh enter into a contract where Raj promises to deliver 15 curtains to Harsh
in one month’s time. Also, Harsh promises to pay Raj an amount of Rs 3,000 on
delivery. In this contract, Harsh’s promise to pay Rs 3,000, on delivery, is the
consideration for Raj’s promise. Also, Raj’s promise of delivering 15 curtains is the
consideration of Harsh’s promise to pay.

Example 2 – Not doing something

Raj has taken a loan from his friend Harsh. However, he has not repaid the loan yet.
Harsh promises not to file a suit against Raj if he promises to repay the loan within a
week. In this case, abstinence on the part of Harsh is due to the consideration of Raj’s
promise of repayment of the ​loan​.

Non-Compete clause:
1) A non-compete is essentially an agreement entered into between two parties
whereby one party is prohibited from joining another competing business by
virtue of being employed or associated with the other party.
2) Such agreements are typically included in an employment contract, either as a
clause in the contract or as a separate agreement.

The legality of ‘non-compete’ in India:

1. While non-compete restrictions imposed during the period of employment are
legal, post-employment restrictions are generally considered unlawful as they
violate the ex-employees’ fundamental right to engage in a trade, profession, or
business.
2. Agreements that restrain trade are also deemed void under Indian contract law.
However, an exception arises in cases where a sale of goodwill is involved, that
is, where the reputational aspects of the business undertaking are also sold or
transferred.
3. Non-compete agreements between partners in a partnership firm, which restrict
the right of outgoing partners from carrying out a competing business, within
reasonable geographical boundaries or time periods, is also permissible.
4. Such arrangements also ensure that the employee does not come into contact
with any trade secrets or confidential information immediately prior to the
termination or resignation from the organization.

Reasonability test
 1. All non-compete clauses are subject to the ‘reasonability test’, and will be
enforceable only if it appears reasonable and necessary to the court.
2. In essence, the courts consider all surrounding facts and circumstances of a
particular case and the nature of restriction imposed on the involved party.
3. In the past, India’s courts have considered geographical limits or time limits while
evaluating the validity of a non-compete clause.

Confidentiality Clause
Confidentiality clause or non disclosure clause in a contract bounds two or
more parties or all the involved parties to ensure and agree that specific type
of information that is furnished by one party or all the parties will remain
confidential.

Key contents in confidentiality clause:

The confidentiality clause must contain the following essentials:
1. Mention the names of parties involved in the agreement
2. Definition of confidentiality in context to the agreement
3. The tenure of non-disclosure
4. Exclusions that are not a part of confidentiality
5. Provisions imposing restrictions upon transfer of data
6. Terms and condition pertaining to confidentiality
7. Type of non-disclosure or confidentiality clause
8. Mention of law and jurisdiction specific to country; in case both the
parties are from different countries

In case of breach of contract, the employer can seek redressal through injunction by
preventing the third party from disclosing confidential information or return of the same
and compensation or damages for loss actually caused due to breach of contract.
 ● Termination
The first and the most obvious consequence is termination. No employer will be willing to
retain employees who maliciously or carelessly lose confidential information, they're no
longer assets for the business. An employer is usually within his legal rights to terminate
the employment, even if there is no confidentiality clause signed up. Breach of
confidentiality is considered to be breach of employment agreement.
● Lawsuit
The employer can even file a lawsuit and if successful, the employee will be required to
pay lawsuit damages. For instance, if some secret is revealed to the competitor and the
employer is able to prove the loss of business or image, the employee has to pay the
same. Even if the employer is not able to prove the quantitative damage, he is entitled to
punitive damage.
● Criminal Charges
In extreme information, a breach of confidentiality can even lead to criminal charges
against the employee. It may happen if the employee is involved in theft of proprietary
data or Intellectual Property.

Section 27 of Indian Contract Act,1872

Section 27 of Indian Contract Act stipulates that an agreement, which restrains anyone from carrying
on a lawful profession, trade or business, is void to that extent.

However, as exception, if a party sells his goodwill to another, he can agree with the buyer that he
will not carry on a similar business within the specified local limits.

Reasonable restrictions can be placed in the following ways:-

1. Distance​: suitable restrictions can be placed on employees to not practice the same

profession within a stipulated distance, the stipulation being reasonable.

2. Time limit​: if there is a reasonable time provided in this clause then it will fall under

reasonable restrictions.

3. Trade secrets​: The employer can put reasonable restrictions on the letting out of trade

secrets.

4. Goodwill​: There is an exception under section 27 of the Indian Contract Act on the

distribution of goodwill.
❖ Following are the main points of the summary of Section 27 by the Delhi High Court in Wipro

Ltd. v. Beckman Coulter International SA case:

1. Negative covenants, such as non-compete, non-solicitation, and non-disclosure, in any

contract, would not commonly be regarded as being in restraint of trade unless the same is

unreasonable or wholly one-sided;

2. After termination, negative covenants in employment contracts aimed to restrict the

employee’s right to seek employment, or to do business in the same field as the employer,

would be in restraint of trade and, therefore, would be void. In other words, no employee can

be forced to either work for the present employer or be idle

Liquidated Damages Clause

● Liquidated damages are presented in certain legal contracts as an

estimate of otherwise intangible or hard-to-define losses to one of the
parties.
● Liquidated damages are meant as a fair representation of losses in
situations where actual damages are difficult to ascertain.
● The courts typically require that the parties involved make the most
reasonable assessment possible for the liquidated damages clause at the
time the contract is signed.

To cover circumstances where a party faces a loss from assets that do not have
a direct monetary correlation. For example, if a party in a contract were to leak
supply chain​ pricing information that is vital to a business, this could fall under
liquidated damages.

A common example is a design phase for a new product. The underlying plans or
designs for a product might not have a set market value. If the plans were
exposed by a disgruntled employee or supplier, it could greatly hamper the ability
to generate revenue from the release of that product. A company would have to
make an estimation in advance of what such losses could cost in order to include
this in a liquidated damages clause of a contract.

This can provide a sense of understanding and reassurance of what is at stake if

that aspect of the contract is breached.

A liquidated damages clause can also give the parties involved a basis to
negotiate from for an out-of-court settlement.
Gender Parity

● Equal pay for equal work for both men and women (Article 39(d))
● The State to make provision for securing just and humane conditions of
work and for maternity relief (Article 42)

ER Act - for equal renumeration

Maternity benefit act

Sexual harrassment of women at workplace(Prevention, Prohibition and Redressal) Act

It is the case of the petitioners that they have produced all the records relating to the
educational qualifications and physical fitness for the post and even after 1= years there was
no reply. Thereafter the petitioners were informed that only 19 ladies have attended the
interview and learnt that the selection was not done as per G.O.No.89, Personnel and
Administrative Reforms Department, dated 17.2.1989. As per the said Government Order,
30% of the vacancies in the Government Departments or Government Owned Undertakings,
Corporations and also in local bodies shall be set apart for women candidates and in spite of
the said Government Order no adequate representation has been given to women and it is
violative of Articles 14, 15 and 16 of the Constitution of India and the conduct of the
respondents/Corporation would amount to hostile discrimination and denial of employment
to women and therefore, the present writ petition is filed for a direction against the
respondents to select and appoint the petitioners to the post of conductors in the existing or
future vacancies on the ground of ​gender​ ​equal​ity