Valid Agreement

A bond is a legal document that binds an individual to a specific obligation or duty. In the context of employment, a bond is often used to ensure that employees fulfill their contractual obligations and do not leave the organization before the specified term of service.

When an employee signs a bond, they agree to pay compensation to the employer if they leave the organization before the expiry of the term of service. This compensation is intended to cover the costs incurred by the employer in recruiting and training the employee, as well as any losses suffered due to the employee's premature departure.

The question asks whether the execution of such a bond requiring employees to pay compensation is considered a valid agreement. The correct answer is option 'C', a valid agreement. Here's why:

1. Consensual Agreement: A bond is a consensual agreement entered into by both the employer and the employee. Both parties voluntarily agree to the terms and conditions stated in the bond.

2. Free Consent: For an agreement to be valid, it must be entered into with the free consent of both parties. In the case of a bond, the employee has the choice to either accept the terms and conditions of the bond or decline the offer of employment. Therefore, the bond is entered into with the free consent of the employee.

3. Lawful Consideration: A valid agreement requires that there be lawful consideration exchanged between the parties involved. In the case of a bond, the consideration provided by the employer is the opportunity to work for the organization, while the consideration provided by the employee is the promise to pay compensation if they leave before the specified term of service. This exchange of consideration makes the agreement valid.

4. Not Expressly Prohibited: There are no laws or regulations that expressly prohibit the execution of bonds requiring employees to pay compensation. As long as the terms and conditions of the bond are reasonable and do not contravene any labor laws or regulations, the bond is considered valid.

In conclusion, the execution of a bond requiring employees leaving the organization before the expiry of the term of service to pay compensation to the employer is considered a valid agreement. Both parties enter into the bond voluntarily, with free consent, and exchange lawful consideration.

C is the correct answer