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Legality of Object and Consideration

Every agreement of which the object or consideration is unlawful is void. An agreement to do what has been prohibited by law cannot be enforced. A Contract to pay some money if a crime or a tort is not enforceable.

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Dilfaraz Kalawat
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2K views

Legality of Object and Consideration

Every agreement of which the object or consideration is unlawful is void. An agreement to do what has been prohibited by law cannot be enforced. A Contract to pay some money if a crime or a tort is not enforceable.

Uploaded by

Dilfaraz Kalawat
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPS, PDF, TXT or read online on Scribd
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Legality of Object

and Consideration

1
One of the essentials of a valid contract is that the
consideration and the object should be lawful. Every agreement
of which the object or consideration is unlawful is void.

Section 23 mentions the circumstances when the consideration


or object of an agreement is not lawful.

Sec. 23 What consideration and objects are lawful, and


what not:
The consideration or object of an agreement is unlawful unless,
 It is forbidden by law, or
 is of such nature that, if permitted, it would defeat the
provisions of law, or
 is fraudulent
 involves or implies injury to the person or property of another;
or
 the Court regards it as immoral or opposed to public policy.

2
1. Forbidden by Law
 When something is forbidden by law, an agreement
to do that is unlawful. An agreement to do what has
been prohibited by the Indian Penal Code or by
some other law cannot be enforced.
 A Contract to pay some money if a crime or a tort is
committed is not enforceable.
 If the law prohibits bigamy, a promise by a married
man to marry another lady is unlawful. Even if the
promise says that a man would marry a woman after
his wife’s death, such a promise is not enforceable
because such a promise tends to break up
marriage, encourages immorality and often leads to
commission of crimes.

3
1. Forbidden by Law
 If the agreement does not satisfy the clear and
unequivocal requirements of a statute it is void.
 In Re Mahmoud and Ispahani, (1921) during the
war the sale of linseed oil without a licence from the
Food Controller had been forbidden. The Plaintiff
agreed to sell linseed oil to the defendant, on a false
assurance from the defendant, that he had such a
license. Subsequently, when the oil was supplied
the defendant refused to accept the same on the
ground that he had such a licence. In an action
against the defendant for damages for breach of
contract it was held that he was not liable as there
was no valid contract between the parties.

4
1. Forbidden by Law
 Merely because a party does not observe certain statutory
requirements does not mean that the agreement is void. The
Court has to see the real purpose of the Act.

 In Smith V. Mawhood, a statute required that a dealer in tobacco


must hold a licence to sell the same and he should also have his
name painted outside the place of his business and the failure to
observe this rule attracted a penalty of £ 200. The plaintiff, who
had sold tobacco without observing the abovestated statutory
requirements, was held entitled to recover the price of the goods.
In this case the real purpose of this Act was to impose a fine on
the offending party for the purpose of the revenue, rather than to
vitiate the contract itself.

5
2. Defeat the provisions
of any law
 If the object or consideration of an agreement is of
such a nature that, if it is permitted, it would defeat
the provisions of any law, such an agreement is
void. Certain acts may not be expressly forbidden by
law, but if they result in circumventing any law, they
cannot be encouraged.
 In Sitaram V.s Harihur, (1911) the natural father paid
a sum of Rs. 8,000/- to a widow to induce her to
adopt his son. It was held that this payment was in
the nature of a bribe and as such was illegal
according to Hindu Law

6
2. Defeat the provisions

of any law
In Abdul Pirojkhan Nabab V. Hussenbi (1904), the Plaintiff
and the defendant, who married under the Mahomedan
law, agreed before marriage that the defendant (wife)
would be allowed to live with her parents after the
marriage. The wife went to her parents and refused to
come back to her husband (plaintiff). He filed a suit for
restitution of conjugal rights. Her defence was that she was
permitted by the agreement made before the marriage, to
live apart, and also that the husband had not paid her
dower amounting to Rs. 1,000/-. It was held that the
agreement before marriage permitting the wife to live
separately was void in law. The Plaintiff was granted the
decree for restitution of conjugal rights conditional upon
payment by him of the stipulated dower of Rs. 1,000/-

7
2. Defeat the provisions
An agreement for future separation between a Mahomedan
of and
husband anywife is law
also void because the same is opposed to
public policy.
 However an agreement to do a thing not contrary to any
provision of law or contrary to public policy, is not unlawful.
 In Sukha Vs. Ninni, it has been held that although according to
Mahomedan Law a man, who has begotten an illegitimate child,
does not have a duty to maintain him but an agreement to
maintain an illegitimate child is not unlawful, and is therefore not
void. Maintenance of illegitimate children, it was further
observed, is in consonance with public policy in India.
 Justice B.P. Bedi, said “ An agreement to maintain an illegitimate
child for which the Mohammedan Law as such makes no
provision, will in my opinion not have the effect of defeating the
provisions of any law …………………………………….. I am,
therefore, not prepared to hold that the consideration for the
agreement if permitted would defeat the provisions of any law”.

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