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Legality of Object

The document outlines the legality of objects and considerations in agreements, stating that agreements are void if they involve unlawful considerations, such as those forbidden by law, fraudulent purposes, or injury to others. It also discusses various types of void agreements, including those that are immoral or opposed to public policy. Key cases are referenced to illustrate these principles, emphasizing that contracts cannot be enforced if they violate legal standards or public policy.

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7 views

Legality of Object

The document outlines the legality of objects and considerations in agreements, stating that agreements are void if they involve unlawful considerations, such as those forbidden by law, fraudulent purposes, or injury to others. It also discusses various types of void agreements, including those that are immoral or opposed to public policy. Key cases are referenced to illustrate these principles, emphasizing that contracts cannot be enforced if they violate legal standards or public policy.

Uploaded by

ravalaanvi05
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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LEGALITY OF OBJECT

(VOID AGREEMENTS) (SS 23 – 30)


UNLAWFUL AGREEMENTS (SEC. 23)
 What considerations and objects are lawful and what not.—
 The consideration or object of an agreement is lawful, unless —
 it is forbidden by law; or
 is of such a nature that, if permitted, it would defeat the provisions of any law; or
 is fraudulent; or
 involves or implies injury to the person or property of another; or the Court regards it as immoral or opposed
to public policy.
 In each of these cases the consideration or object of an agreement is said to be unlawful.

 Every agreement of which the object or consideration is unlawful is VOID.


ENFORCEABILITY OF CONTRACT

 contract is void if its purpose is to commit an illegal act


 a contract which is expressly or impliedly prohibited by law and
 the contract which cannot be performed without disobedience to law.
 the consideration or object of an agreement is opposed to public policy, the
agreement becomes invalid. (question of law)
 Brij Mohan v MPSRTC AIR 1987 SC 29 - forfeiture clause was
unreasonable. It ruled that a contract cannot contain unfair and
unconscionable terms that harm one party disproportionately.
 Public policy – wide discretion
 Impact – illegality – cannot be used to claim damages or performance.
OBJECT AND CONSIDERATION

 1. Forbidden by Law – When something is forbidden by law an agreement to do that is unlawful section 23
provides that any agreement, the object or consideration of which is forbidden by law is unlawful and therefore
void.

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.

 Nandlal v Thomas J William, 171 IC 948 - The plaintiff was licensed under an Excise Act to work a liquor shop.
The Act forbade the sale, transfer or sub-lease of the license or the creation of a partnership to run the shop.
The plaintiff took the defendant into partnership. The partnership was held void as it would defeat the policy of
the law if unapproved persons could find their way into working liquor shops. An agreement indirectly defeating
the provisions of an Act would be equally void.
3. FRAUDULENT

 An agreement made for a fraudulent purpose is void. Where the parties


agree to impose a fraud on a third person, their agreement is unlawful where
a debtor agreed to pay a separate commission or to give preference to a
creditor in order to induce his consent to a composition which is proposed
with other creditors, the object of the agreement is fraudulent.
 For example, A, being agent for a land proprietor, agrees for money without
the knowledge of his principal to obtain for B a lease of land belonging to his
principal. The agreement between A and B is void as it implies a fraud by
concealment by A, on his principal.
4. INJURY TO PERSON OR PROPERTY OF ANOTHER

 An agreement which involves injury to the property of another


person is void under section 23 of the Indian Contract Act and
cannot be enforced in law. No claim for damages is sustainable for
the breach of such an unlawful agreement.
 For example if A enters into an agreement with B on the condition
that if B destroys the property of C by fire. A would pay B Rs. 5000.
This contract is void under section 23 as the consideration is not
only unlawful but also involves injury to the property of C.
5. IMMORAL OR OPPOSED TO PUBLIC POLICY

 Under section 23 contracts opposed to public policy and immoral would be really void and
not illegal. Immorality depends on the terms accepted by the society at a particular point
of time.
 The operation of doctrine of sexual immorality such as Dealings with Sex workers or Illegal
Cohabitation etc.
 Gherulal Parekh v. Mahadeodas Maiya, AIR 1959 SC 781: Settlement of consideration of
concubinage, contracts of sale or hire of things to be used in a brothel or by a prostitute
for purposes incidental to her profession, agreements to marriage for consideration or
contract facilitating divorce are held to be void on the ground that the object is immoral.
VOID AGREEMENTS

 Giving the meaning of a void agreement, the Act says in


 Section 2(g): An agreement not enforceable by law is said to be void.
 The following types of agreement are declared to be void:
 (1) Agreements unlawful in part [S. 24];
 (2) Agreements without consideration [S. 25];
 (3) Agreements in restraint of marriage [S. 26];
 (4) Agreements in restraint of trade [S. 27];
 (5) Agreements in restraint of legal proceedings [S. 28];
 (6) Unmeaning/ Uncertain agreements [S. 29];
 (7) Wagering agreements [S. 30].

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