legalityofobject-110219050243-phpapp02

8/13/2019 legalityofobject-110219050243-phpapp02

1/4

LEGALITY OF OBJECT AND CONSIDERATION

One of the essentials of valid contract is that the consideration and the o!ect

sho"ld e la#f"l$ Ever% a&ree'ent of #hich the o!ect or consideration is "nla#f"l

is void$ Section () of the act Section *+ of the Indian Contract Act elaorates this in

the follo#in& 'anner, All a&ree'ents are contracts if the% are 'ade for a la#f"l-

consideration,$

Accordin& to Sec$()./hat consideration and o!ect are la#f"l and #hat not 0 The consideration or

o!ect of an a&ree'ent is la#f"l1 "nless

1. It is foridden % la# or

2. Is of s"ch nat"re that1 if 2er'itted1 it #o"ld defeat the 2rovisions of an% la#3 or

)$ Is fra"d"lent3 or

3. Involves or i'2lies in!"r% to a 2erson or 2ro2ert%3 or

4. Co"rt re&ards it as i''oral1 or o22osed to 2"lic 2olic%

In each of these cases1 the consideration or o!ect of an a&ree'ent is said to e

"nla#f"l$ Ever% a&ree'ent of #hich the o!ect or consideration is "nla#f"l is void$

The aove acts1 #hieh are "nla#f"l1 are disc"ssed as "nder$

*$ FORBIDEN BY LA/ 0 An a&ree'ent to #hat has een 2rohiited % the Indian

4enal Code or % so'e other la# cannot e enforced e$&$ An a&ree'ent to sell

li5"or #itho"t license1 #hen a license is re5"ired to sell the sa'e is void$ A c$ontract

to 2a% so'e 'one% if a cri'e is co''itted is 2rohiited % la#$ If the a&ree'ent

does not satisf% the re5"ire'ent of the Stat"te1 it is void$ In the case of 6eh'ood

and Isfani1 d"rin& the #ar the sale of linseed oil #itho"t a license fro' the Food

Controller had een foridden$ The 2laintiff a&reed tosell linseed oil to the

defendant1 on a false ass"rance fro' defendant that he had s"ch a license$S"se5"entl% #hen the oil #as s"22lied1 the defendant ref"sed to acce2t the sa'e

on the &ro"nd that he did not 2ossess necessar% license$ In an action a&ainst the

defendant for da'a&es for reach qf contract it #as held that he #as not liale1 as

there #as not valid contract et#een the 2arties$

($IS OF S7C8 NAT7RE T8AT$ IF 4ER6ITTED$ IT /O7LD DEFEAT T8E

4RO9ISIONS OF ANY LA/ 0 If s"ch a&ree'ents are 'ade the% are void$ La#

'a% not e:2ressl% forid certain acts1 "t if the% res"lt in circ"'ventin& an% la#

the% cannot e enco"ra&ed$ /e can e:2lain the aove 2oint #ith the hel2 of

follo#in& e:a'2les $

E:a'2les0 The a&ree'ent et#een the 2artners #ith a vie# to evadin& 2a%'ent of

lnco'e Ta: and Sales Ta: #as ai'ed at defeatin& the 2rovisions of Ta: La#s and

#as o22osed to 2"lic 4olic% and therefore the sa'e #as not enforceale$;

Si'ilarl% an a&ree'ent for se2aration et#een a 6oha''edan 8"sand < /ife is

also void eca"se the sa'e is o22osed to 2"lic 2olic%$


2/4

A;s estate is sold for arrears of reven"e "nder the 2rovisions of an act of the

le&islat"re % #hich the defa"lter is 2rohiited fro' 2"rchasin& the estate$ B1 "2on

an "nderstandin& #ith A1 eco'es the 2"rchaser1 and a&rees to conve% the estate to

A "2on receivin& fro' hi' the 2rice B has 2aid$ The a&ree'ent is void as it renders

transactions to defeat the o!ect of La#$

)$ IS FRA7D7LENT =If the consideration or the o!ect of an a&ree'ent is to

co''it fra"d1 the a&ree'ent is void e$&$ A1 B < C enter into an a&ree'ent for the

division a'on& the' of &ains ac5"ired1 or to e ac5"ired1 % the' % fra"d$ Thea&ree'ent is void1 as its o!ect is "nla#f"l$ Si'ilarl% if a detor has 'ade a

co'2ro'ise #ith his creditors1 a&reein& to 2a% the' one third of the so'e d"e1 "t

'a>es a secret a&ree'ent #ith the 2laintiff a&reein& to 2a% hi' in f"ll1 the secret

a&ree'ent #ith one creditor is fra"d on the other$

'

The case on 6anni Ra' vs 4"rshotta' Lal is cited$ A >ne# that the rail#a%

co'2an% #o"ld not &rant hi' a contract1 he entered into a contract #ith B that B

sho"ld 2"t for#ard an a22lication for the contract and after the contract #as

&ranted1 A shall serve as the real contractor$ A ro"&ht an action to 2"t his clai' as

a real contractor$ It #as held % the co"rt that the a&ree'ent #as to co''it fra"d"2on the rail#a% co'2an% therefore the contract #as void$

?$ IN9OL9ES OR I64LIES INJ7RY TO A 4ERSON OR 4RO4ERTY 0 If the

consideration or the o!ect of an a&ree'ent is to ca"se in!"r% to a 2erson or

2ro2ert% of another the a&ree'ent is "nla#f"l and #ill e treated as void$ In!"r%

'eans to har' 2erson or 2ro2ert%$ e$&$ A 2ro'ises B1 an editor of a local dail% to

2a% Rs$ @+++0 for 2"lishin& a defa'ator% article a&ainst C$ This a&ree'ent

involves in!"r% to C and hence is void$ Si'ilarl% a&ree'ent 'ade et#een t#o

2arties to in!"re a 2erson or har' 2ro2ert% of another 2erson is void a&ree'ent$

/hat #e have disc"ssed aove cases "t there are other circ"'stances #here theo!ect or consideration to an a&ree'ent is "nla#f"l #hich are disc"ssed as "nder.

@$CO7RT REGARDS IT AS I66ORAL 0 /hat is i''oral has not een defined

% the Indian Contract Act1 it de2ends on the nor's acce2ted % the societ% at a

2artic"lar 2oint of ti'e$ The i''oral Act1 #hich the La# has dealt1 is se:"al

i''oralit% e$&$ illicit cohaitation1 2rostit"tion1 and interference #ith the 'artial

relations$ $ An% contract1 #hich involves or assists or 2ro'otes se:"al i''oralit%1 is

void$

E:a'2les

a A 'an let o"t his ho"se1 to a 2rostit"te3 >no#in&l% #ell the fact in advance isi''oral$

A achelor enterin& into a contract #ith a 'arried #o'an to otain divorce

fro' her h"sand and thereafter to 'arr% hi' is a void contract on the asis of

i''oralit%$

c An a&ree'ent to let her da"&hter hire to a 2erson for conc"ina&e for a

consideration is i''oral and 2"nishale "nder the la#$


3/4

The case of Naraini 9s 4%are 6ohan is cited$ In this case1 Naraini a 'arried

#o'an lived as 'istress #ith one Go2al Lal for *+0 ** %ears efore the latter;s

death$ Go2al Lal 'ade a &ift to Naraini thro"&h a &ift deed$ After Go2al Lal;s

death his sister;s son 4%are 6ohan Lal had also started livin& in the ho"se and he

ref"sed to vacate the ho"se and 2"t his clai' to the sa'e$ It #as held % the co"rt

that Naraini;s livin& #ith Go2al #as not treated as ad"ltero"s eca"se her

h"sand;s consent to her livin& that #a% #as 2ossil% there$ The o!ect of the &ift

#as not considered "nla#f"l eca"se the sa'e had een done for t#o thin&s1 i$e$Naraini;s cohaitation #ith Go2al Lal and also her services d"rin& her sta% #ith

hi'$

$

$ O44OSED TO 47BLIC 4OLICY 0 The la# see>s to 2revent an% transaction1

#hich is o22osed to 2"lic 2olic%3 The co"rts do 2la%a &reat role in inter2retin&

#hether the a&ree'ent is in consonance #ith the reco&nised 2"lic 2olic% or not$

The follo#in& acts can e treated as "nla#f"l$

a Tradin& #ith ene'% co"ntr%

Interferin& #ith the ad'inistration of J"stice c Traffic in 4"lic Officesd Restrainin& 2ersonal liert%

e Cha'2ert% interferin& 2arental d"t%

f Creatin& 6ono2olies

& 6arria&e ro>era&e contract

h A&ree'ent in Restraint of 6arria&e Section ( i A&ree'ent in Restraint of

Trade

TRADING /IT8 ENE6Y CO7NTRY 0 If the co"ntr% declares an% co"ntr% as

ene'% co"ntr% accordin& to its 2olitical stat"s1 the a&ree'ents #ith s"ch co"ntr%

a'o"nt to o22ose to 2"lic 2olic%$ If the 2erfor'ance of the contract 'ade in ti'e

of 2eace is rendered "nla#f"l % the o"trea> of #ar1 the oli&ation of the contractis s"s2ended or dissolved accordin&l% as the intention of the 2arties can or cannot

e s"stantiall% carried on % 2ost2onin& the 2erfor'ance till the end of hostilities$

INTERFERING /IT8 T8E AD6INISTRATION OF J7STICE 0 An a&ree'ent

to stifle 2rosec"tion tends to e 2erversion or a"se of !"stice therefore s"ch an

a&ree'ent is$ void th"s #here A a&rees to sell certain land to B in consideration of

B astainin& fro' ta>in& cri'inal 2roceedin&s a&ainst his son a'o"nts to

interference #ith the ad'inistration of J"stice$ Si'ilarl% if an a&ree'ent #ith a

roer for restoration of 2ro2ert% #ith the 2ro'ise not to ta>e action in the co"rt

in a cri'inal case 2endin& a&ainst the said roer in the sa'e case is interferin&

#ith ad'inistration of J"stice$

$TRAFFIC IN 47BLIC OFFICES 0 The a&ree'ent for the sale or transfer of

2"lic offices or to otain 2"lic titles li>e 4ad'a Shree is ille&al on the &ro"nd of

2"lic 2olic%$

RESTRAINING 4ERSONAL LIBERTY 0 An a&ree'ent #hich "nd"l% restricts the

2ersonal liert% of an% 2erson is void on the &ro"nd of 2"lic 2olic% th"s an


4/4

a&ree'ent % a creditor #ith detor to #or> as onded lao"r is an e:a'2le of

restrainin& 2ersonal liert%$

C8A64ERTY INTERFERING 4ARENTAL D7TY 0 /hen a 2erson hel2s in

liti&ation in e:chan&e of a 2ro'ise to hand over a 2ortion of fr"its of liti&ation1 if

an%1 is called Cha'2ert%$ 7nder the Indian Contract Act s"ch a&ree'ents are void

and are a&ainst 2"lic 2olic%$ Th"s an a&ree'ent #ith the la#%er to &ive three

fo"rth share of the 2o2er% if recovered #as held to e cha'2erto"s and void$

CREATING 6ONO4OLIES 0 A&ree'ents havin& for their o!ect the

estalish'ent of 'ono2olies are o22osed to 2"lic 2olic% and therefore void$ It is

also hit % 6RT4 act$

6ARRIAGE BROERAGE CONTRACT 0 All a&ree'ent to ne&otiate 'arria&e

for re#ard1 #hich is >no#n as 'arria&e ro>era&e contracts are void and are

o22osed to 2"lic 2olic%$ For instance an a&ree'ent to 2a% 'one% to a 2erson hired

to 2roctire a #ife is o22osed to 2"lic 2olic%$ Si'ilarl% the 'arria&e of a 'inor

da"&hter for so'e consideration % a father is o22osed to 2"lic 2olic%

AGREE6ENT iN RESTRAINT OF 6ARRIAGE SECTION ( 0 Ever%a&ree'ent in restraint of 'arria&e; other than a 'inor is void$ Th"s an a&ree'ent

% a 2erson1 ein& a 'a!or a&rees for &ood consideration not to 'arr% a 2artic"lar

2erson is void and not indin& since the sa'e is void and a&ainst 2"lic 2olic%$

AGREE6ENT IN RESTRAINT OF TRADESECTION ( 0 Ever% a&ree'ent %

#hich an%one is restrainedfrom e:ercisin& a la#f"l 2rofession1 trade or "siness of

an% >ind is to that e:tent void$ Th"s an a&ree'ent % A #ith B for a &ood a'o"nt

of consideration not to do a certain "siness in a certain area is in restraint of trade

and o22osed to 2"lic 2olic%$

legalityofobject-110219050243-phpapp02

Documents

Transcript of legalityofobject-110219050243-phpapp02