Basic Concept of Negative Covenant
A negative covenant, also known as a restrictive covenant, is a contractual provision that restricts one party from carrying out certain specified actions. These covenants may involve some form of compensation to the party that consents to the restriction. Negative covenants are commonly found in employment contracts, mergers and acquisitions, bond documents, and land use agreements.
Legal Framework Under Indian Law
Section 27 of Indian Contract Act, 1872
