Legality of Objectives and Consideration

Condition of unlawful agreement and void agreement

The contract is void if the object or consideration is illegal or violates international law. The Indian Contract Act specifies which purposes and factors are legal and which are not in Section 23.

When money is borrowed for a minor's marriage, for instance, the loan is the consideration of the contract and the marriage itself is the object, which is prohibited by the Child Marriage Restraint Act. Section 23 states that the following situations/conditions constitute unlawful objects or considerations for agreements.

• When the consideration or object is forbidden by law:
  • For instance, Ashish pledges to get Bishal a job in the government, and Bishal offers to provide Ashis Rs. 1,000,000. Due to the illegal nature of the consideration, the agreement is null and invalid.
  • Once more, Ashish, Bishal, and Calvina come to an agreement for the sharing of earnings obtained by fraud or that are to be obtained through deception. The agreement is invalid since it has an illegal purpose.
• When the object or consideration is of such a nature that, if permitted, it would beat the provision of any law:
  • For instance, Ashis's estate is sold in order to make up revenue arrears, as per the terms of a legislative act that prohibits the defaulter from buying the Estate. According to their agreement, Ashis becomes the seller and Bishal becomes the buyer. Bishal agrees to sell Ashis the estate in exchange for the sum he has paid. The agreement is unlawful because it would violate the law's intent by effectively ministering a purchase by the defaulter.
• When the consideration or object is fraudulent:
  • For instance, Ashis, who is acting as the agent for a landowner, consents to lease some of his principal's property to Bishal in exchange for money without the knowledge of his principle. As it suggests a deception by Ashis concealing information from his principal and is therefore illegal, the agreement between Ashis and Bishal is null and invalid.
• When the object or consideration involves injury to the person or property of another:
  • For instance, Ashis pledges to drop the robbery case he has filed against Bishal, and Bishal promises to pay back the value of the items taken. The agreement is invalid since it has an illegal purpose.
• When the court regards the object or consideration as immoral or opposed to public policy:
  • Against public policy includes and includes the following:
    • Trading with a criminal or enemy.
    • Exploitation of public positions.
    • Getting in the way of the justice system's operation.
  • Let's assume that Ashis, Bishal's mukhtar, agrees to use his position of power to influence Bishal in Calvena's favor in exchange for Ashis receiving Rs 100,000 from Calvena. Because the agreement is unethical or illegal, it is null and void.
  • Once more, Ashis consents to allow her daughter to engage in concubinage with Bishal. In spite of the fact that the letting may not be penalized or deemed guilty according to the Indian Penal Code, the agreement is void since it is immoral or illegal.
  • The purpose or consideration of an agreement is said to be unlawful or immoral in each of the aforementioned scenarios. Every agreement of which the object or consideration is unlawful/immoral is void.

Void Agreements

The law prohibits discriminatory treatment of creditors, therefore if one is secretly paid more or given more favor, the other creditors may dissolve the arrangement. The agreement between the parties is not enforceable or voidable by the preferred creditor. According to the premise that a debtor is susceptible to pressure from a creditor who has the power to force the debtor to file for bankruptcy by refusing to enter into a composition, the debtor is characterized to recoup payments given to such a creditor.

A contract that is not enforceable by law is considered invalid. A void agreement is therefore void from the start and has no legal ramifications. Such a contract is not an agreement in the eyes of the law. The many kinds of void agreements have previously been covered in the other chapters, therefore we won't go over them again here:

• Agreements made with a minor or a person not of sound mind.
• Agreements made in error on both sides that are actually relevant to the agreements.
• Agreements in which a portion of the subject matter or value is illegal and the illicit portion cannot be separated from the legal portion.
• Contracts that are signed without compensation.

Expressly Declared Void Agreements

The last prerequisite for a legitimate contract, according to Section 10, is that it shouldn't be one that the Contract Act has "expressly declared" void. Therefore, the question of whether agreements are "expressly declared" void and what are not arises. The Indian Contract Act has "expressly declared" the following contracts to be void or illegal:

• Agreements in restraint of wedding.
• Agreements in restraint of business.
• Agreements in restraint of legal dealings.
• Agreements the meaning of which is uncertain or unclear.
• Agreements by way of hazard.
• Agreements contingent on impossible or unattainable events.
• Agreements to do impossible deeds.

Difference between Void Agreement and Illegal Agreement

Void Agreement:

The word "void" indicates that there should be no legal obligation, whereas the word "agreement" refers to an understanding between parties over a policy. To put it simply, a void agreement is one that is not legally enforceable, or one that cannot be enforced in court. When declared void, an agreement loses its capacity to be legally enforceable. Such an agreement does not grant the parties any obligations or rights, and they also do not acquire any legal standing. The associated transactions with the void agreement will be valid.

Illegal Agreement:

Any arrangement that is unlawful, violates the law, goes against public policy, or is improper is said to be illegal. These agreements were declared void from the beginning. Consequently, the collateral agreements are also null and void. The agreements are completely forbidden by law, so entering an illegal agreement will result in the parties being punished. The parties are thus held accountable by the law for the same.

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