Response

Any one-sided bond is declared null and invalid under the Indian Contract Act 1872.

The parties must agree with their free consent, that is, without force, coercion, undue influence, deception, or error, the employment agreement with the negative covenant is legitimate and legally binding.

Because an employment bond must be a legally binding contract, an employer must make an offer, which must be accepted by the employee.

Bonds are only relevant if the firm has spent money on the employees’ personal grooming and enhancement, not only on training to help them perform better.

To assess the loss sustained by the employer, the court examines the actual expenditures incurred by the employer, the employee’s duration of service, and the contract’s terms to arrive at a reasonable compensation amount.

Section 27 of the Indian Contract Act can be used to dispute the validity of employment bonds.

Any arrangement in restriction of trade or profession is prohibited under Section 27 of the Indian Contract Act of 1872.

Any trade or profession agreement that violates Section 27 of the indian contract act is null and invalid.

In order for an employment bond to be legal under Indian law, it must be demonstrated that it is required for trade freedom.

If the employer can show that the employee is joining a rival in order to reveal the trade secret, the court may impose an injunction prohibiting the employee from leaving.

Reference: Section 27 in The Indian Contract Act, 1872
27. Agreement in restraint of trade, void.ÑEvery agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. ÑEvery agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

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