Service Agreement
4 years ago
Hey, I'm a software engineer working with a small start up, my company gave me a training of 3 months after joining and then asked me to sign a bond of 3.5 years and if I'll leave the company in between then I have to pay 3.5 lakhs rupees. Now after 2 years due to some health issues I decided to leave my job, but due to that service agreement my company is asking me to fill a bond money of 3.5 lakhs. I want to know if this service agreement of 3.5 years on the basis of only 3 months training is valid or not. And if yes, does this bond money of 3.5 lakhs is valid to pay or not?
Sharanagouda S Patil
Responded 4 years ago
A.You may approach suitable jurisdiction court, you should not pay bond money, as per ID Act creating bond is illegal, call or consult through this Web admin.
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Ashish K Dongre
Responded 4 years ago
A.You dont have to pay the bond money of 3.5 lakh. What they have spend on your Training period they can recover. You better contact lawyer for more details.
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Shreyash Mohta
Responded 4 years ago
A.Service Agreements are legal and are enforceable as well.
However, the terms of resignation include a specified notice period which should be served before such termination or resignation.
In case that the employee wants to resign he shall intimidate about such resignation to the employer and then, duly serve his notice period.
If the employee wants to leave immediately and does not intend to serve the notice period he can do so by waiving off some amount of his salary as non paid and shall not claim the same.
In no condition can an employer demand for anything more or can claim a compensation for more than the actual damages suffered due to such resignation.
If you have served the notice period you shall not be liable to pay anything. Also by the query you have posted, I feel that the terms of the agreement are is unconscionable.
Unconscionable contracts are drafted in such a manner that they favor one party and impose, harsh, unfair, unjust conditions on the other party. An unconscionable contract is one that is so gross and unreasonable in the light of the business practices of the time and place that it should not be enforced. The doctrine of unconscionability allows the court to intervene into the contractual relations of parties and modify such agreements. Unconscionability is a contract defense used in cases where there is combination of unfair contract terms and deficient bargaining. This paper clarifies the distinction between the forms of unconscionability and how the doctrine of unconscionability is applied in Indian Law with respect to the Uniform Commercial Code and Restatement emphasising how unconscionability is used as a ground for avoiding an agreement.
Unconscionability is not defined anywhere in any Indian Law. There have been various debates on this issue and the Law Commission of India in its 103rd and 199th Reports recommended that there should be changes in the existing laws to protect the citizens of our country against unconscionable contracts. However, we can look at various other provisions of the Indian Contract Act to understand the doctrine of unconscionability and how it is used for avoiding the contract.
Section 16 of the Act explains that a contract is obtained by undue influence if one party dominates the other party and uses this unfair position to obtain unfair advantage over the other party. According to Section 19, such contract is voidable at the option of the party whose consent was so obtained.
According to Section 23, the agreement is void if the object of the agreement is unlawful, fraudulent, immoral, or opposed to public policy.
There are plethora of case laws available on the subject of Unconscionability of contracts. Most prominent of all relates to clauses of Employment Agreement wherein the contract, in most of the cases, are poorly drafted, thus favouring the employer.
The employers provide unreasonable clauses in employment contracts and impose very unfair conditions on the employees. In Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, the Supreme Court held that a clause providing for termination of the services of a permanent employee by serving a three months notice on him is arbitrary, unreasonable, opposed to public policy and thus unconscionable. In a similar case, the Supreme Court held a clause unconscionable as it conferred unbridled and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons for such termination.
The employment contracts contain clauses where one party is allowed to modify or cancel the contract at his will even though there is no breach of the contract by the other party. Such clauses are held to be unfair, arbitrary and unconscionable.
There are various other judgments where Courts have held such arbitrary and unreasonable clauses in the contracts unconscionable and held that the principle of arbitrariness should not be extended to employment contracts to safeguard the interests of the employees.
I hope everything is clear now and I was able to solve your query.
Thanks.
Adv. Shreyash Mohta
However, the terms of resignation include a specified notice period which should be served before such termination or resignation.
In case that the employee wants to resign he shall intimidate about such resignation to the employer and then, duly serve his notice period.
If the employee wants to leave immediately and does not intend to serve the notice period he can do so by waiving off some amount of his salary as non paid and shall not claim the same.
In no condition can an employer demand for anything more or can claim a compensation for more than the actual damages suffered due to such resignation.
If you have served the notice period you shall not be liable to pay anything. Also by the query you have posted, I feel that the terms of the agreement are is unconscionable.
Unconscionable contracts are drafted in such a manner that they favor one party and impose, harsh, unfair, unjust conditions on the other party. An unconscionable contract is one that is so gross and unreasonable in the light of the business practices of the time and place that it should not be enforced. The doctrine of unconscionability allows the court to intervene into the contractual relations of parties and modify such agreements. Unconscionability is a contract defense used in cases where there is combination of unfair contract terms and deficient bargaining. This paper clarifies the distinction between the forms of unconscionability and how the doctrine of unconscionability is applied in Indian Law with respect to the Uniform Commercial Code and Restatement emphasising how unconscionability is used as a ground for avoiding an agreement.
Unconscionability is not defined anywhere in any Indian Law. There have been various debates on this issue and the Law Commission of India in its 103rd and 199th Reports recommended that there should be changes in the existing laws to protect the citizens of our country against unconscionable contracts. However, we can look at various other provisions of the Indian Contract Act to understand the doctrine of unconscionability and how it is used for avoiding the contract.
Section 16 of the Act explains that a contract is obtained by undue influence if one party dominates the other party and uses this unfair position to obtain unfair advantage over the other party. According to Section 19, such contract is voidable at the option of the party whose consent was so obtained.
According to Section 23, the agreement is void if the object of the agreement is unlawful, fraudulent, immoral, or opposed to public policy.
There are plethora of case laws available on the subject of Unconscionability of contracts. Most prominent of all relates to clauses of Employment Agreement wherein the contract, in most of the cases, are poorly drafted, thus favouring the employer.
The employers provide unreasonable clauses in employment contracts and impose very unfair conditions on the employees. In Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, the Supreme Court held that a clause providing for termination of the services of a permanent employee by serving a three months notice on him is arbitrary, unreasonable, opposed to public policy and thus unconscionable. In a similar case, the Supreme Court held a clause unconscionable as it conferred unbridled and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons for such termination.
The employment contracts contain clauses where one party is allowed to modify or cancel the contract at his will even though there is no breach of the contract by the other party. Such clauses are held to be unfair, arbitrary and unconscionable.
There are various other judgments where Courts have held such arbitrary and unreasonable clauses in the contracts unconscionable and held that the principle of arbitrariness should not be extended to employment contracts to safeguard the interests of the employees.
I hope everything is clear now and I was able to solve your query.
Thanks.
Adv. Shreyash Mohta
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Rameshwar Dadhe
Responded 4 years ago
A.If any notice period clues in agreement then it will be possible
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A.Dear Sir,
The law is not like that. Let the company approach Civil Court. The Courts says that you are liable to pay only the amount spent on your actual training.
Thanks.
The law is not like that. Let the company approach Civil Court. The Courts says that you are liable to pay only the amount spent on your actual training.
Thanks.
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