BL Unit 1 Chapter 6
BL Unit 1 Chapter 6
LEGALITY CF OBJECT
AND CONSIDERATION
1. Adapted from Chesire and Fifoot, The Law of Contract, IV Ed., p. 72.
2. ( 1906), 33 Cal. 702.
3. Cf. Pollock and Mulla, Indian Contract Act, p. 138.
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make secret profits is illegal and void as it tends to create a conflict between
interest and duty.
(vii) Agreements unduly restraining personal liberty. Agreements which
unduly restrict personal freedom have been held to be void and illegal as being
against public policy.
ILLUSTRATION. A, borrowed money fromB, a moneylender, and agreed that
he would not, without the written consent of B, leave his job, borrow money,
dispose of his property or change his residence. It was held that the agreement
was illegal as it unduly restricted the liberty ofA (Harwood vs Millers Timber&
Trading Co. 30).
(viii) Agreements interfering with parental duties. A father, and in his
absence the mother, is the legal guardian of his/her minor child. The authority
of a guardian is to be exercised in the best interest of the child, in accordance
with good public morals. If, therefore, the right of guardianship is bartered
away by any agreement which is inconsistent with the duties arising out of
such custody, such an agreement shall be void on the ground of public policy.
ILLUSTRATION. For monetary consideration, A agrees to place his daughter at
the disposal ofB to be married as B likes. The agreement is illegal and void as it
would interfere with A's parental duty to select a husband in the best interests of
the girl (Atma Ram vs Ban/at Ma/3 1).
(ix) Marriage brokerage agreements. These are agreements for the pay-
ment of money in consideration of procuring for another in marriage a husband
or a wife. Such agreements are illegal and void as being contrary to public
policy. Thus, when a ' Prohit' was promised t200 in consideration of procuring
a wife for the defendant, the agreement was held invalid and the money could
not be recovered (Pitamber vs Jagjiwan 32) .
Further, an agreement of dowry 33 i.e., to give money or property to the
parents of the bride or the bridegroom in connection of their agreeing to the
contract of marriage is also illegal and cannot be enforced. But such an agree-
ment is illegal in respect of payment only, the validity of marriage is not af-
fected. So, once the marriage is solemnised, money if actually paid cannot be
recovered back, and if not paid, a suit therefore would not lie, because the
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agreement to pay is illegal. Of course the money can be recovered when the
marriage is not performed (Dharnidhar vs Kanhji Sahay34). Similarly, clothes
and ornaments or their value can be recovered if the marriage does not take
place (Girdhari Singh vs Neeladhar Singh 35 ).
(x) Miscellaneous cases. The following agreements have also been held
to be against public policy:
(a) Agreements "tending to create monopolies" are illegal and void
(Kameshwar Singh vs Yasin Khan 36 ).
(b) Agreements to defraud revenue authorities are void and illegal. For
example, an agreement by which an employee was to get, in addition to salary,
an expense allowance grossly in excess of the expenses actually incurred by
him, was held illegal because the provision as to expenses was contrary to
public policy being merely a device to defraud the income-tax authorities
(Napeier vs National Business Agency Ltd. 37).
(c) Agreements whereby money is given to induce persons to give evi-
dences in a civil court are void because every one is expected to perform his
legal duty (Adhiraja Shatty vs Vitti/ Bhatta38 ).
Object or Consideration Unlawful in Part
Section 23 (already discussed) deals with cases in which object or/and
consideration is wholly illegal. But what is the position if the same agreement
contains both legal and illegal terms, i.e., it is partly legal and partly illegal?
Sections 24, 57 and 58 of the Contract Act provide for such cases. Accordingly,
if the object or consideration is partially unlawful, the following rules will apply:
1. When an agreement contains several distinct promises to do things
legal and also other things illegal, and the legal part cannot be separated from
the illegal part (i.e., the consideration for different promises is a single sum of
money), the whole agreement is illegal and void (Sec. 24).
ILLUSTRATIONS. (a) A , promises to superintend, on behalf of B, a legal
manufacture of indigo and an illegal traffic in other articles. B promises to pay to
A a salary oftI0,000 a year. The agreement is void and unlawful. Here a part of
the object is legal and a part is illegal which are not severable because the
consideration for both promises is a single sum ofmoney (Illustration to Sec. 24).
(b) A , agrees to serve Bas his housekeeper and also to live in adultery with him
at a fixed salary. The whole agreement is unlawful and void. A cannot sue even for
service rendered as housekeeper because it cannot be ascertained as to what was
due on account of adulterous intercourse and what was due for housekeeping
(Alice Hill vs William Clarke 39 ).
2. Where there is reciprocal promise to do things legal and also other
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things illegal, and the legal part can be separated from the illegal part (i.e. , there
is a separate consideration for different promises), the legal part is a contract
and the illegal part is a void agreement (Sec. 57).
ILLUSTRATION. A and B agree that A shall sell Ba house fortl0,000, but that,
if Buses it is as a gambling house, he shall pay A t50,000 for it. The first set of
reciprocal promises, namely, to sell the house and to pay tI0,000 for it, is a
contract. The second set is for an unlawful object, namely, that B may use the
house as a gambling house, and is a void and illegal agreement. (Illustration to
Section 57). Here it is to be noted that the two promises are distinct and severable
with a separate consideration for each such promise. The promises are thus
independent of each other except that they form part of the same contract.
3. In the case of an alternative promise, one branch of which is legal and
the other illegal, the legal branch alone can be enforced (Sec. 58).
ILLUSTRATION. A and B agree that A shall pay B n ,000 for which B shall
afterwards deliver to A either rice or smuggled opium. This is a valid contract
to deliver rice and a void and unlawful agreement as to opium (Illustration to
Section 58).
40 . ' Illegal' and ' Void' agreements have been distinguished in detail in Chapter 1 under the
heading " illegal and Void Agreements Distinguished."
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been carried out or has not been carried out, is immaterial. The rule oflaw is that
"no action is allowed on an illegal agreemenl" and " in case of equal guilt, the
position of the defendant is better than that of the plaintiff."
ILLUSTRATION. X promises Y to pay fl0,000 if he murders Z. If Y commits
the murder, he cannot recover the amount from X. If X has already paid the
amount and Y fails in murdering Z, X cannot recover the amount back.
TEST QUESTIONS
1. In what cases the object and consideration of an agreement are said to be
unlawful under the Contract Act? Illustrate with examples.
2. What do you understand by an illegal agreement? What is the effect of illegal
agreements on collateral transactions?
3. "An agreement is illegal and shall not be enforced if the court regards it as
immoral." Comment.
4. Discuss the doctrine of public policy. Name the various types of agreements
which are considered to be opposed to public policy. Are the categories of public policy
closed?
5. Examine the validity of agreements with consideration and object unlawful in
part.
PRACTICAL PROBLEMS
Attempt the following problems, giving reasons for your answers:
1. A promises to pay a certain sum of money to B, who is an intended witness in
a suit against A, in consideration ofB's absenting himselfat the trial. B absents but fails
to get the money. Can he recover?
[Hint. B cannot recover the money because an agreement which tends to create a
conflict between interest and duty is illegal and void being opposed to public policy.]
2. In a suit by A against B for the recovery of tS,000, A is in need of money C
agrees to provide funds to A in consideration of sharing one-fourth of the money
recovered from B. Decide the validity of the agreement between C and A.
[Hint. The agreement between C and A is valid. It is a champertous agreement
which is valid provided its terms are fair and reasonable and is made with a bona.fide
object of assisting a just claim.]
3. A, while his wife B was alive, promised to marry C in the event of B' s death.
Subsequently B died but A refused to marry. C sues A for damages for breach of
promise. Decide.
[Hint. C will not succeed because an agreement for future marriage, after the death
of first wife is against good public morals and hence illegal and void (Wilson vs Carnley,
1908, 1 K.B. 729)].
4. A , entered into an agreement withB and engagedB for the purpose of performing
puja (prayer) for A 's success in a suit which he had before the court and promised to
pay ~2,000 in the event of success. A succeeded in the suit. B sued A for the amount
agreed upon. Will B succeed?
[Hint. No, B will not succeed as the object ofthe agreement is to interfere with the
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course ofjustice, making the agreement illegal and void. It has been held that where the
o bjcct ofan agreement is to exercise some extraneous infl ucncc, unauthorised by law, on
the mind of the court, the agreement is contrary to public policy and hence void
[Bhagwan Datt Shastri vs Raja Ram, (1927) All. 406]. However, in Balasundara
Mudaliar vs Mohamed Usman , A.I.R. (1929) Mad. 812, a promise of reward by a
Muslim litigant to a Hindu devotee in consideration of offering prayers for the success
of his suit has been held not against public policy. Thus accordingly the agreement
between A and B is valid and B must succeed.]
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