Mod 1. 6 - Legality of Object

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INTRODUCTION

If an agreement is to be enforced in a court of law, both consideration and object of

the agreement must be lawful.

When one of consideration or object is unlawful, the contract is void.

In order to constitute a valid contract, both consideration as well as object must be

lawful; otherwise would be void.

According to section 23The consideration or object of an agreement is lawful

unless it is forbidden by law; or is of such a nature that if permitted, it would defeat

the provisions of any law; or is fraudulent; or involves or implies injury to the personor property of another; or the court regards it as immoral, or opposed to public policy.

In each of these cases, the. consideration or object of an agreement is unlawful is

void.


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WHEN CONSIDERATION OR OBJECT IS UNLAWFUL

1. I it is o!"i##en "$ %&'(!aw forbids an act for various reasons. If theconsideration or the object of an agreement is doing of such an act which is forbiddenby law, the agreement is void.

2. I it is o s)c* & n&t)!e t*&t+ i ,e!-itte#+ it 'o)%# #ee&t t*e ,!oisions o %&'(It refers to cases where, there being no e"press statutory prohibition against aparticular type of contract, the nature of the contract is such that it would be againstthe spirit of a particular law, whether enacted or otherwise.

3.I it is !&)#)%ent(It refers to contract which are entered into between parties withan object which is fraudulent or with a purpose which will in effect promote fraud.

/. I it ino%es o! i-,%ies in0)!$ to t*e ,e!son o! ,!o,e!t$ o &not*e!.If the objectof an agreement is to cause injury to the persons or property of another, it is unlawful.Injury means criminal or wrongful harm. An agreement to commit an assault is void

. I t*e co)!t !e&!#s it &s i--o!&%(Agreement which are contrary to good moralsare illegal and void. If the consideration for the agreement is an act of se"ualimmorality the agreement is illegal.


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. W*e!e t*e co)!t !e&!#s it &s o,,ose# to ,)"%ic ,o%ic$(The agreement thatare injuries to the public or which is against the public good or public welfare are void.

AGREE4ENTS O55OSED TO 5UBLIC 5OLICY

I. T!in 'it* ene-$(Agreements with alien enemies would injure the state inrelation with other states. It is unlawful to enter into a contract with a foreign enemyduring war or to perform such a contract enters into before the war.

2. A!ee-ent o! s&%e o ,)"%ic oices &n# tit%es(Where the object of anagreement is to sell or transfer a public office from one person to another or to securehonour or title for monetary consideration, the said agreement is void being opposedto public policy. #ecause, such an agreement, if enforced, will lead to inefficiency andwill corrupt the administration of state.

3. A!ee-ents "$ '&$ o -&inten&nce &n# c*&-,e!t$($aintenance means anagreements in which a person promises to render help by money or otherwise, toanother person in a case in which the said third person has himself no interest for itsprosecution or defence. %hamperty is an agreement whereby one party is to assistanother in recovering property and it so share the proceeds of the action.


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/. A!ee-ents o! sti%in ,!osec)tion(Agreements for suppressing prosecutionare not enforceable in a court of law since they are opposed to public policy.

. A!ee-ents in !est!&int o %e&% ,!ocee#ins(If the object of an agreement is torestrain an individual from going to a court of law for redress and relief. &uch anagreement is void since it is opposed to public policy.

E6ce,tions(Agreements to refer a present or future dispute to arbitration is perfectlyvalid. 'owever, if the parties agree that they will abide by the arbitrator(s award alone,whether just or unjust, the agreement will be void.

. A!ee-ents !est!ictin ,e!son&% %i"e!t$(Agreements which unduly restrict thepersonal freedom, parties to it are void as being against public policy.

7. A!ee-ents ten#in to c!e&te inte!est o,,ose# to #)t$(It person enters into anagreement whereby he is bound to do something which is against his public orprofessional duty, the agreement is void on the ground of public policy.

8. A!ee-ents inte!e!in 'it* -&!it&% st&t)s(Agreements to create againstmarital duties are void.

9. 4&!!i&e B!o:e!&e &!ee-ents(Agreements to procure marriages for rewardare void since marriage ought to proceed from the free and voluntary decision of theparties.


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1;. A!ee-ents in !est!&int o -&!!i&e()reedom of choice in marriage has been

guaranteed to every person who is major in age. If the object of an agreement is to

restrain a person from marriage, such agreement is void since it is opposed to public

policy.

11. A!ee-ents to #e!&)# c!e#ito!s o! !een)e &)t*o!ities(An agreement the

object of which is to defraud the creditors or the revenue authorities is not

enforceable, being opposed to public policy.

12. A!ee-ents in !est!&int o t!e(Where the object of an agreement is to

interfere with the freedom of a person to carry on any lawful trade or profession the

said agreement is called agreement in restraint of trade. Any restraint of trade not

only affects the means of livelihood of an individual but also affects the industrial

growth and enterprise and thereby wea*ens the whole economic system of a country.


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E


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JUDICIARY E


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4I5

A6377$78T&


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4I5 A6377$78T9. Agreement by incompetent parities -sec 99

0. Agreement ma*e under a mutual mista*e of fact. -sec 0:. Agreement the consideration or object of which is unlawful. -sec 0

>. Agreement in restraint of trade sec 01

1. Agreement the consideration or object of which is unlawful is part sec 0

90. Agreement to do impossible act sec =>

9. In case of reciprocal promise to do things legal and also other things

illegal, the second set of reciprocal promise sec =1


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Wagering agreement or wager

sec :A wager agreement between two parties bywhich one promise to pay money or money(s

worth on the happening of uncertain event in

consideration of the other party(s promise to

pay it if the event does not happen.

7"ample+ If A and # enter into agreement that

A shall pay # rs 9:: if it rains on $onday, and# shall pay the same amount if it does not rain


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7ssential of wagering contract

/romise to pay money or money worth.

ncertain event

7ach party must stand to win or lose.

8o control over the event

8o other interest in the event


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7ffects of wagering agreements.

&uit to recover damages.

/rincipal and agent sec 000

%ollateral transaction


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3estitution

When a contract become void, the other

party who has received any benefits under

it must restore it to the other party or mustcompensate the other party by the value

of the benefits. This restoration of the

benefit is *nown as restitution


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Mod 1. 6 - Legality of Object