When is an Object or Consideration Unlawful?
Section 23 of Indian Contract Act 1872 deals with lawful objects and consideration
The consideration or object of an agreement is unlawful, when
-it is forbidden by law;
or
-is of such nature that, if permitted, it would defeat the provisions of any law;
or
-is fraudulent;
or
-involves or implies injury to the person or property of another
or;
-the Court regards it as immoral or opposed to public policy.
Ex- A, a landlord, let his house on rent to B, a commercial sex worker, knowing that it would be used for immoral trafficking. The landlord cannot recover the rent. Here, the object being immoral, the agreement to pay rent is void.
In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.
Examples of Unlawful Object or Consideration
1) A, B and C enter into an agreement for the division among them of gains acquired, or- to be acquired, by them by fraud. The agreement is void, as its object is unlawful.
2) A promises to obtain for B an employment in the public service, and B promises to pay 1, 000 rupees to A. The agreement is void, as the consideration.
PUBLIC POLICY AND AGREEMENT OPPOSED TO PUBLIC POLICY:
Public policies are those policies which are made by the government authorities for the welfare of common people. If an agreement is made which is against public policy, that agreement will be void. The following are some agreements which are opposed to public policies:
Trading with the enemy
Cases of Provoking Suits by Maintenance and Champerty
Agreement in restraint of marriage
Agreements in restraint of Trade
Agreements in restraint of Legal Proceedings
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