Some agreements are held to be opposed to public policy. Define any six agreements with reference to provisions of the Indian Contract Act, 1872. OR…

CA Foundation · Business Laws · PYQS · January 2026
Some agreements are held to be opposed to public policy. Define any six agreements with reference to provisions of the Indian Contract Act, 1872. OR Some objects and consideration are unlawful. Define any six with reference to provisions of the Indian Contract Act, 1872.

Suggested Answer and Working Notes:

First Alternate: According to the provisions of the Indian Contract Act,1872, some of the agreements which are held to be opposed to public policy are: (1) Trading with Enemy: Any trade with person owing allegiance to a government at war with India without the licence of the Government of India is void, as the object is opposed to public policy. Here, the agreement to trade offends against the public policy by tending to prejudice the interest of the State in times of war. (2) Stifling Prosecution: An agreement to stifle prosecution i.e. “an agreement to present proceedings already instituted from running their normal course using force” tends to be a perversion or an abuse of justice; therefore, such an agreement is void. The principle is that one should not make a trade of felony. The compromise of any public offence is generally illegal. (3) Maintenance and Champerty: Maintenance is an agreement in which a person promises to maintain suit in which he has no interest. Champerty is an agreement in which a person agrees to assist another in litigation in-exchange of a promise to hand over a portion of the proceeds of the action. (4) Trafficking relating to Public Offices and Titles: An agreement to trafficking in public office is opposed to public policy, as it interferes with the appointment of a person best qualified for the service of the public. Public policy requires that there should be no money consideration for the appointment to an office in which the public is interested. (5) Agreements tending to create monopolies: Agreements having for their object the establishment of monopolies are opposed to public policy and therefore void. (6) Marriage Brokerage Agreements: An agreement to negotiate marriage for reward, which is known as a marriage brokerage contract, is void, as it is opposed to public policy. (7) Interference with the Course of Justice: An agreement whose object is to induce any judicial officer of the State to act partially or corruptly is void, as it is opposed to public policy. (8) Interest against Obligation: The following are examples of agreement that are void as they tend to create an interest against obligation. The object of such agreements is opposed to public policy. (1) An agreement by an agent to receive without his principal’s consent compensation from another for the performance of his agency is invalid. (2) A, who is the manager of a firm, agrees to pass a contract to X if X pays to A - 200,000 privately; the agreement is void. (9) Consideration Unlawful in Part: By virtue of Section 24, if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void. OR Second Alternate: Some objects and consideration are unlawful Under Section 23 of the Indian Contract Act,1872 in each of the following cases the consideration or object of an agreement is said to be unlawful: (i) When consideration or object is forbidden by Law: Acts forbidden by law are those which are punishable under any statute as well as those prohibited by regulations or orders made in exercise of the authority conferred by the legislature. (ii) When consideration or object are of such a nature that if permitted, it would defeat the provisions of Law: If the consideration or the object of an agreement is of such a nature that not directly but indirectly, it would defeat the provisions of the law, the agreement is void. (iii) When it is Fraudulent: Agreements which are entered into to promote Fraud are Void. (iv) The general term “injury” means criminal or wrongful harm: The object or consideration is unlawful as it involves injury to the person or property of another. (v) When consideration is Immoral: Agreements where the object or consideration is unlawful, being immoral. (vi) When consideration is opposed to Public Policy: The expression ‘public policy’ can be interpreted either in a wide or in a narrow sense. The freedom to contract may become illusory, unless the scope of ‘public policy’ is restricted. In the name of public policy, freedom of contract is restricted by law only for the good for the community.

Topics: The Indian Contract Act, 1872

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