Upload
anaghapuranik
View
238
Download
0
Embed Size (px)
Citation preview
8/11/2019 8. Legality of Object
1/26
JMM KLELC 1
Indian Contract Act,1872
Legality ofConsideration and
Object
8/11/2019 8. Legality of Object
2/26
JMM KLELC 2
S. 23 What considerations and objects arelawful, and what not
The consideration or object of an agreement is lawful,
unless-1. It is forbidden by law; or
2. Is of such a nature that ,if permitted, it would defeat theprovisions of any law; or
3. Is fraudulent; or
4. Involves and implies injury to the person or property ofanother; or
5. The court regards it as immoral, or opposed to publicpolicy.
In each of these cases, the consideration or object ofan agreement is said to be unlawful. Every agreement of
which the object or consideration is unlawful, is void.
8/11/2019 8. Legality of Object
3/26
JMM KLELC 3
Illustrations
A agrees to sell his house to B for Rs. 10,000.Here B's promise to pay the sum of Rs. 10,000 is the
consideration for A's promise to sell the house, andA's promise to sell the house is the consideration forB's promise to pay Rs. 10,000.
These are lawful considerations.
A promises to pay B 1,000 rupees at the end ofsix months, if C, who owes that sum to B, fails to pay
it. B promises to grant time to C accordingly. Herethe promise-of each party is the consideration for thepromise of the other party.
They are lawful considerations.
8/11/2019 8. Legality of Object
4/26
JMM KLELC 4
A promises, for a certain sum paid to himby B, to make good to B the value of his ship if it
is wrecked on a certain voyage. Here A's promiseis the consideration for B's payment and B'spayment is the consideration for A's promise
These are lawful considerations.
A promises to maintain B's child and B
promises to pay A 1,000 rupees yearly for thepurpose. Here the promise of each party is theconsideration for the
promise of the 'other party.
They are lawful considerations.
8/11/2019 8. Legality of Object
5/26
JMM KLELC 5
A, B and C enter into an agreement forthe division among them of gains acquired, or
to be acquired, by them by fraud.The agreement is void, as its object is
unlawful.
A promises to obtain for B anemployment in the public service, and Bpromises to pay 1,000 rupees to A.
The agreement is void, as the
consideration for it is unlawful.
8/11/2019 8. Legality of Object
6/26
JMM KLELC 6
A, being agent for a landed proprietor, agreesfor money, without the knowledge of his principal,
to obtain for B a lease of land belonging to hisprincipal.
The agreement between A and B is void. as itimplies a fraud by concealment, by A, on his
principal.
A promises B to drop a prosecution which he
has instituted against B for robbery, and B promisesto restore the value of the th
ings taken.
The agreement is void, as its object is
unlawful.
8/11/2019 8. Legality of Object
7/26
JMM KLELC 7
A's estate is sold for arrears of revenueunder the provisions of an Act of the
Legislature, by which the defaulter isprohibited from purchasing, the estate. B,upon an understanding with A, becomes
the purchaser, and agrees to convey theestate to A upon receiving from him theprice which B has paid.
The agreement is void, as it renders thetransaction, in effect a purchase by thedefaulter, and would so defeat the object
of the law.
8/11/2019 8. Legality of Object
8/26
JMM KLELC 8
A, who is B's mukhtar, promises to exercise
his influence, as such, with B in favour of C, andC promises to pay 1,000 rupees to A.
The agreement is void, because it is immoral
A agrees to let her daughter to hire to B forconcubinage.
The agreement is void, because it isimmoral, though the letting may not bepunishable under the Indian Penal Code. (45 of1860.)
8/11/2019 8. Legality of Object
9/26
JMM KLELC 9
Analysis of S. 23
Object or ConsiderationThe section covers legality of consideration
and object as well.
Object and consideration sometimes may bedifferent both shall be lawful
Eg. loan for child marriage considerationlawful but object unlawful -defeats thepurpose of CMRA
8/11/2019 8. Legality of Object
10/26
JMM KLELC 10
Considerationor object
Forbidden by law
Defeat the provision of any law
Fraudulent
Injury to person or property
Immoral/opposed public policy
8/11/2019 8. Legality of Object
11/26
JMM KLELC 11
Forbidden by LawObject of an agreement forbidden by law is void
Law law in force in India, personal lawsunwritten principles of law
Eg. Sale of liquor without license is void & price
irrecoverableEg. License to run liquor shop sale, transfer, sub-
lease of license or creation of partnership to runliquor shop agreement of partnership void
Eg. An agreement to by goods (jaggerypowder)above control price is void
8/11/2019 8. Legality of Object
12/26
JMM KLELC 12
Defeat the provision of any lawObject or consideration of an agreement is such that
though it is not directly prohibited, if permitted,would defeat the provision of any law, suchagreement is also void.
Sundersingh v. krishnasingh
agreement by the accused with surety for providingsecurity under Cr. P.C.void
Agreement to defeat the law of a friendly country isalso void
Foster v. DriscollAgreement to buy whisky inGreat Britain & to smuggle it in to US led to commission of offence in a foreign & friendly
country breach of international comity hence void.
8/11/2019 8. Legality of Object
13/26
JMM KLELC 13
But innocent violation of municipal or foreign law whichmay not offend public conscience, may not make theagreement void
Howard v. Shirlaster Container Transport LtdOwner of an aircraft agreed with the pt for successfully
removing his aircraft from Nigerian territorialairspace. Pt did so without permission of the Nigerianauthorities and landed it in Ivory coast. The pt did sounder the belief that there was imminent danger tolives in Nigeria. Pt sued for fees
Held: allowed to recover. Although court would notnormally enforce a contract to enable a pt to benefit
from his criminal conduct, because to do so, wouldoffend public conscience. There are circumstances, itwould be wrong to disqualify a person fromrecovering, even though his conduct constitutedstatutory offence.
8/11/2019 8. Legality of Object
14/26
JMM KLELC 14
FraudulentAn agreement made for a fraudulent purpose to
deceive third parties is void
Eg. Agreement with debtor and creditor that thecreditor would get separate commission for inducingother creditors to enter into composition of their
debts.Eg. Two decree holders - Pt, decree holder with
property attachment brought it to sale agreed withthe dt to buy for lesser price and then pay him a sum
property was knocked down to dt for a small price.Held, agreement void, it deprived the other decreeholder of what he would have got if the sale had beencompetitive.
8/11/2019 8. Legality of Object
15/26
JMM KLELC 15
Injury to person or propertyAn agreement to injure the person or property
of another is unlawful and voidEg. A person barrowed a sum of Rs. 100 and
agreed to serve pt for 2 yrs without pay and incase of default to pay the exorbitant interestand principal at once.
Held, it involved slavery and unlawful and void
agreement to commit assault, hurt,
defamation, etcEg. Agreement of insurance insured
committing suicide to help dependents
void.
8/11/2019 8. Legality of Object
16/26
JMM KLELC 16
Immoral Agreement tainted immorality is not enforced
Immorality depends on standards of moralityprevailing in a society at a given time and asapproved by courts.
Instances of immorality-
1. Interference with marital relations Eg. Money lent to a married woman to enable her to
get divorce from her husband and promise to marrythe lender
void Promise to marry a woman after her husbands death
void
8/11/2019 8. Legality of Object
17/26
Immoral
Fender v. St. Johndt a married man told anurse that he was unhappy with his wife andenquired whether she would marry him if hiswife divorces him she consented, sexual
relations took place dtswife secured decreeof divorce on the ground of adultery dtcommitted breach and married another
HELD: pt was allowed to claimcompensation circumstances leading tomischief were absent hence not immoral.
JMM KLELC 17
8/11/2019 8. Legality of Object
18/26
JMM KLELC 18
2. Dealings with Prostitutes
Always considered immoral Eg. sale/hiring of goods to a prostitute for
enabling her to carry on her business
void Landlord knowingly letting his house for
carrying on the business of prostitution
void
8/11/2019 8. Legality of Object
19/26
3. Illegal cohabitation
Englandpast consideration not valid ifpromise in writing to pay for illegalcohabitation
Indiapromise to pay for-i. Adulterous cohabitation, past/ present/future void
ii. Future cohabitation void
iii. Past cohabitation to secure it in future voidiv. Past cohabitation only valid
JMM KLELC 19
8/11/2019 8. Legality of Object
20/26
JMM KLELC 20
Opposed to public policyAn agreement is unlawful if the court regards its
object or consideration as opposed to publicpolicy
publicpolicy vague & unsatisfactory term.
TEST: the twin touchstones of public policy are,
advancement of public good and
prevention of public mischief.
These questions have to be decided by judges not asmen of legal learningbut as experienced and
enlightened members of the community representingthe highest common factor of public sentiment andintelligence
Eg. Surrender of rights, sale of seats in public offices,etc.
8/11/2019 8. Legality of Object
21/26
JMM KLELC 21
Heads ofPublic Policy
Tradingwith
Enemy
Traffickingin
PublicOffice
Interferencewith
Administration
ofjustice
Interferencewith
Courseof justice
ShiftingProsecution
Maintenanceand
Champerty
MarriageBrokerage
contracts
Unfair orUnreaso-
nabledealings
8/11/2019 8. Legality of Object
22/26
1. Trading with an enemy
Object of war is to cripple the commerce of
enemy country
A declaration of war imports prohibition of
commercial intercourse and correspondence with
the inhabitants of enemy country.
Illegal except with the permission of the Crown.
JMM KLELC 22
8/11/2019 8. Legality of Object
23/26
2. Trafficking in Public offices
An agreement with a public officer toact corruptly is contrary to public
policy.
Agreement to provide money to aparliamentarian to influence his
judgment
sale of public offices in consideration
of money .JMM KLELC 23
8/11/2019 8. Legality of Object
24/26
3 Interference with Administration
of Justice
Interferencewith course of
justice
Shiftingprosecution
Maintenance &Champerty
JMM KLELC 24
8/11/2019 8. Legality of Object
25/26
4. Marriage brokerage contracts
An agreement to procure marriage of a person in
consideration of money void
Agreement for the sale of girl void
Attempt to make any material gain out of
marriage is equally opposed public policy and
void
Gifts promised at the time of marriage void
JMM KLELC 25
8/11/2019 8. Legality of Object
26/26
5. Unfair and unreasonable dealings
Where-
Parties economically are not on same footing
Unequal bargaining power
One in a position to exploit and the other is
vulnerable
Bargain is apparently unfair
Opposed to public policyEg. Service contracts.
JMM KLELC 26