Legality of object and
Consideration
Definition
If the object or the consideration is unlawful, the agreement will not be enforced by the court.
Here the “Object” means the purpose of the agreement.
Unlawful Agreement
According to section 23 of the Act the consideration and the object of an
agreement are unlawful in the following cases:
1.If it is forbidden by Law:If the object Or consideration of an agreement are
forbidden by law, the agreement is void.
Ex: The agreement between two parties to kill someone.
2.If it is of such a nature that,if
permitted, it would defeat the provision of any law:
If the object or considerationindirectly lead to a violation of the law,the
agreement is void.
Ex: To reduce the Municipal tax if the
Landlord entered into the agreement with the tenant that 1/3 of his rent is considered as service charge to defraud the municipal authority.In that case if the landlord suit a file against the tenant to recover the
service charge,it will be treated as void .
3.If it is fraudulent: An agreement whose Object is to defraud others is void.
Ex: A,B and C enter into an agreement for the division among them by fraud.
The agreement is void.
4.If it involves or implies injury to the
person or property of another:This type of agreements are void agreement.
Ex:An agreement by which a debtor promised to do manual labour for the
creditor so long as the debt was not repaid in full,is a void agreement.
5.If the court regard it as immoral:
An agreement whose object is immoral or where the consideration is immoral,is void.
Ex: A man who knowingly let out his house for keeping stolen goods.
6.If the court regard it as opposed to public policy:
An agreement which is injurious to the public or against the interest of the
society is said to be opposed to public policy.
Ex: A man who knowingly let out his house for keeping people who are
kidnapped.
