Some objects and consideration are unlawful. Define any six with reference to provisions of the Indian Contract Act, 1872.
CA Foundation · Business Laws · RTP · September 2026
Some objects and consideration are unlawful. Define any six with reference to provisions of the Indian Contract Act, 1872.
Suggested Answer and Working Notes:
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. Example: A, B and C enter into an agreement for the division among them of gains acquired, or to be acquired, by them by fraud. The agreement is void, as its object, viz., acquisition of gains by fraud is unlawful. (iv) The general term “injury” means criminal or wrongful harm. In the following example, the object or consideration is unlawful as it involves injury to the person or property of another. Example: An agreement to print a book in violation of another's copyright is void, as the object is to cause injury to the property of another. It is also void as the object of the agreement is forbidden by the law relating to copyright. (v) When consideration is Immoral: The following are the examples of 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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