MOOT PREPOSITION
B.A. LL.B.
SEM-1
Indiana is a country in South Asia and one of the oldest civilizations in the world. The Indiana
Contract Act, 1872 is a key law that governs the making, performance, and enforcement of
contracts in Indiana. It came into force on 1st September 1872 and ensures that agreements are
fair, clear, and enforceable. This law is especially important in today’s changing business
world, where both traditional and digital transactions take place regularly.
Ananya Gupta, a 17-year-old took admission in May, 2024 as a first-year student at a reputed
private university in the city of Arkina at the State of Varuna, is a highly talented entrepreneur.
She has already developed and patented two biotech innovations related to skin treatment.
In August 2024, Ananya entered into a Joint Venture Agreement (JVA) with Zenixa Life
Sciences Pvt. Ltd., a mid-sized pharmaceutical company based in Varuna. The agreement
was signed by Ananya Gupta and Mr. Raghav Mishra, Managing Director of Zenixa.
Key Terms of the Agreement:
• Zenixa would invest ₹5 crores to help scale and develop Ananya’s patented technology.
• Ananya would transfer partial patent rights to Zenixa.
• Profits would be shared in a 40:60 ratio (Ananya: Zenixa).
• The agreement included:
o An arbitration clause for dispute resolution,
o A non-compete clause,
o A clause restricting Ananya from working with any third party in the same
field for 10 years.
As Ananya was a minor, her father, Mr. Rajeev Gupta, was mentioned in the annexures as a
guardian-consenter. Mr. Rajeev Gupta participated in the negotiations of the agreement at the
initial stage, however, he did not sign the main agreement which was mentioned in the
annexures.
Later, disputes arose when Zenixa questioned Ananya’s commitment to the agreement and the
future of the venture. Zenixa took steps to enforce the agreement by:
Filing a case in the City Civil Court of Arkina for breach of contract, to claim damages and
enforce the agreement. The City Civil Court gave the Judgement in Favour of Ananya and
declared the agreement void ab initio.
Dissatisfied by the judgement given by City Civil Court Zenixa filed the appeal before the
Hon’ble High Court of Varuna
In response, Ananya challenged the validity of the contract, arguing:
1. She was a minor at the time of signing, making the contract void from the beginning.
2. The restrictions in the contract (non-compete and 10-year collaboration ban) were
against public interest and unreasonable.
3. She did not give free consent, as she was under academic and professional pressure
to accept the deal.
Zenixa argues that:
1. Ananya acted independently and presented herself as competent in various
professional and commercial activities.
2. Ananya received funds, used lab resources, or began collaborative work with Zenixa
post-signing. Not only this she maintained professional email exchanges, attended
board meetings and had bank transactions related to the joint venture.
3. Her father’s reference in the annexure and her active role amount to implied consent
and ratification.
4. The agreement was made in good faith and was beneficial to both parties, so equity
demands enforcement.
The matter is now before the Hon’ble High Court of Varuna, where both parties are seeking
relief—Ananya to declare the contract void, and Zenixa to enforce it and seek damages.
Issues for Consideration:
1. Whether the Joint Venture Agreement is void ab initio under Section 11 of the Indiana
Contract Act, 1872, as Ananya was a minor at the time of execution?
2. Whether the restrictive clauses in the agreement—namely the non-compete and the 10-
year bar on collaboration with third parties—are in violation of Section 27 of the
Indiana Contract Act, 1872, as being in restraint of trade?
3. Whether there was absence of free consent under Section 14 of the Indiana Contract
Act, 1872, due to academic and professional pressure on the Ananya at the time of
signing the agreement?
4. Whether the conduct of the Ananya, including her active participation in negotiations,
professional dealings, and benefit from the contract, estops her from claiming the
agreement is void?
5. Whether the non-compete and exclusivity clauses are reasonable and necessary for
protecting the Company’s legitimate business interests, and thus not void under Section
27 of the Indiana Contract Act, 1872?
6. Whether the arbitration clause is severable and independently enforceable, despite the
Ananya’s minority status?
Note: The students have to presume that all the laws applicable in India are applicable in
Indiana. The Powers and Functions of Varuna High Court is Pari Materia with the Gujarat High
Court. The City Civil Court of Arkina here is Pari Materia with City Civil of Ahmedabad.
