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Legality

of

Object

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LEGALITY OF OBJECT

According to Section 23 of the Act, theobject of an agreement is unlawful in the

following cases:1. If it is forbidden by law:[Case: Srinivas v. Raja Ram Mohan]

A loan granted to the guardian of a minorto enable him to celebrate the minors marriage

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It is in contravention of the Child Marriage

Restraint Act and is illegal and cannot berecovered

2. If it is of such a nature that if permitted,it would defeat the provisions of anylaw

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[Alexander v. Rayson]

A let a flat to B at a rent of 1200 a year. With a view to reduce the municipal tax A

made two agreements with B. One, by

which the rent was stated to be 450 onlyand the other, by which B agreed to pay750 for services in connection with

the flat. Held : A could not recover 750 since theagreement was made to defraud themunicipal authority and thus void

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3. If it is fraudulent

Example: A, B and C enter into anagreement for the division among them of

gains acquired or to be acquired, by themby fraud. The agreement is void as itsobject is unlawful

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4. If it involves or implies injury to the

person or property of another[Case: Ram Saroop v. Bansi]

A borrowed Rs. 100 from B. He (A)

executed a bond promising to work for Bwithout pay for 2 years and in case ofdefault agreed to pay interest at a very

exorbitant rate and the principal amount atonce.

Held : The contract was void

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5. If the Court Regards it as Immoral

[Baivijli v. Hamda Sagar]M advanced money to R , a marriedwoman to enable her to obtain a divorce

from her husband. M agreed to marry heras soon as she could obtain a divorce.

Held: M could not recover advanced moneybecause the object of agreement wasimmoral.

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6. If it is opposed to public policy

(i) Trading with enemy

(ii) Agreements for stifling prosecution

(iii) Contracts in the nature champerty andmaintenance

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(iv) Agreements for the sale of public offices

and titles

[Case: Saminathan v. Muthusami ]

A promises to pay a sum to B in order toinduce him to retire so as to provide roomfor As appointment to the public office

held by B

Held: The agreement is void

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(v) Agreements in restraint of parental rights

[Giddu Narayanish v. Mrs. Annie Besant] A father having two minor sons agreed to

transfer their guardianship in favour ofMrs. Annie Besant and also agreed not torevoke the transfer.

Subsequently, he filed a suit for recoveryof the boys and a declaration that he wasthe rightful guardian,

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Held : The Court held that he had the right to

revoke his authority and get back thechildren.

(vi) Marriage brokerage[Venkatakrishna v. Venkatachalam ]

A sum of money was agreed to be paid to

the father in consideration of his giving hisdaughter in marriage.Held : Such a promise amounted to a

marriage brokerage contract and was void

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(vii) Agreement in restraint of marriage

(viii) Agreements in restraint of legal

proceedings

(ix) Agreements in restraint of trade

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[Oakes & Co. v. Jackson ]

J , an employee of a company, agreed notto employ himself in a similar concernwithin a distance of 800 miles from Madrasafter leaving the companys service.

Held : The agreement was void

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Exceptions: [Cases in which restraint of

trade is valid in India]

1. Sale of goodwill

[Goldso l l v . Go ldm and ] S , a seller of imitation jewellery, sells his

business to B and promises not to carry

on business in imitation jewellery and real jewellery.

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Held : The restraint with regard to

imitation jewellery was valid but notregarding real jewellery

2. Partners agreement:3. Service agreements (i) Any other engagement during his

employment [ valid](ii) A similar engagement after the

termination of his services [void]

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A agreed to become assistant for 3 yearsto B who was a doctor practising atChennai.

It was agreed that during the term of theagreement A was not to practise on hisown account in Chennai.

After one year, A started his own practice.

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Held : The agreement was valid and Acould be restrained by an injunction fromdoing so.

Example A bank appoints an officer subject to thecondition that after ceasing to be in servicehe would not join the service of any otherbank in India for a period of 5 years

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Held: T he bank shall not be in a position to

enforce such condition.

(x) Agreement restricting personal liberty

(xi) Agreement tending to create interestopposed to duty

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THANK YOU

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