Lawf
ulConsi
der
ati
onandObj
ect
Thefourthessentialelementofav al
idcontr
actisthatthecontr
actmustbef oralawful
consider
ationandwi thal awfulobject
.Therearealway stwopart
iesinacontractandtheymake
reci
procalpromisest oeachot her.Assuchthethingwhi chi
sconsiderat
ionforoneparty,
the
samet hi
ngi st
heobj ectf ort
heot herpart
y,andthethingwhichistheobjectforonepart
yisthe
consider
ationfortheot herparty
.
I
ll
ust
rat
ion:Acont
ract
swi
thBt
osel
lj
ishor
sef
orRs1000.I
nthi
scase,
thesal
eofhor
sei
s
theobj
ectofcontr
actf
orAandi
tisconsi
derat
ionofthecont
ractforB,
whi
l
ethepay
mentofRs
1000isconsi
derat
ionf
orAandi
tistheobj
ectofthecontr
actforB.
Theterm'object'meansthemot i
ve,
purpose,ordesignf orwhichi
tisent
eredi
nto.The
consider
ati
onf oracontr
actmaybel awfulwhi
leit
sobj ectatthesametimemaybeunl awful
.
Butineit
hercase,whethertheconsi
derati
onisunlawfulortheobjecti
sunlawf
ul,t
heagreement
i
sv oi
d.
Def
ini
ti
onofConsi
der
ati
on:
-Theexi
stenceofconsi
der
ati
oni
simpor
tantf
orav
ali
dcont
ract
.
Cont
ract
sresultonl
ywhenonepr
omisei
smadeinexchangef
orsomet
hingi
nret
urn.The
somethi
nginretur
niswhatwemeanbyconsi
der
ati
on.
Sect
ion2(
d):
-When,
att
hedesi
reoft
hepr
omi
sor
,thepr
omi
seeoranyot
herper
son:
(
1)hasdoneorabst
ainedf
rom doi
ngsomet
hing,
or
(
2)doesorabst
ainsf
rom doi
ngsomet
hing,
or
(
3)pr
omi
sest
odoort
oabst
ainf
rom doi
ngsomet
hing.
Suchactorabst
inenceorpr
omi
sei
scal
l
edaconsi
der
ati
ont
othepr
omi
se.
Whenconsi
der
ati
onorobj
ecti
sunl
awf
ul(
Sect
ion23):
Thesevenci
rcumst
ancewhi
chwoul
dmakeconsi
der
ati
onaswel
lasanobj
ectunl
awf
ular
e
di
scussedbel
ow:
(1)Forbi
ddenbyl aw:Iftheobj
ectortheconsiderati
onofanagreementisthedoingofanact
forbi
ddenbylaw,theagreementi
sv oi
d.Anacti sforbi
ddenbylawwheni ti
spunishabl
ebythe
cri
minall
awoft hecountryorwheniti
spr ohi
bit
edbyspeci all
egi
slat
ionorr
egulat
ionsmadeby
acompet entaut
horit
yunderpowersderiv
edf r
om thelegisl
atur
e.
(2)De f
eatofthepr ovi
sionoflaw:I
ftheobj
ectort
heconsi
der
ati
onofanagreementi
ssuch
that,
thoughnotdi
rectl
yforbi
ddenbyl
aw,i
twoulddef
eatt
heprov
isi
onsofanyl
aw,the
agreementisvoi
d.
(3)Defeatofanyr uleforthetimebei nginforceinIndia:Itiswell
establi
shedruleofl
aw
thatt
heunlessthewi l
li
sprovedinsomef or
m, nograntofprobatecanbemademer el
yonthe
consentofthepart
ies.Henceanagreementorcompr omiseasr egar
dsgenuineanddue
execut
ionofawi l
l
,toitseff
ectistoexcl
udeevidenceinproofofthewil
l,i
snotlawfulsoasto
beenforceabl
eundertheprovisi
onsoftheCivi
lProcedur
eCode.
(4)Fraudul
ent:Anagreement,whi
chi
smadeforafraudul
entpur
poseisvoi
d.Thusan
agreementi
nfraudofcredi
tor
swithav
iewt
odefeat
ingthei
rri
ghtsisv
oid.
(5)Inj
urytothepersonorpropert
yofanother:I
ftheobjectorconsi
der
ati
onofan
agreementi
sinj
uryt
ot heper
sonorpr
oper
tyofanot
her,i
tisvoid,
beinganunl
awful
agreement
.
6)I
( mmor
al:
Anagr
eementwhoseobj
ectorconsi
der
ati
oni
simmor
al,
isi
l
legal
andt
her
efor
e
v
oid.
(7)Agreementopposedt opublicpol i
cy:Itisnoteasytodef i
netheter
m' PublicPoli
cy'
with
anydegreeofpr
ecisionbecause'publicpoli
cy'byit
sverynature,i
shighl
yuncertai
nandkeeps
onf l
uct
uati
ngwit
ht hepassageoftime.Anagr eement,whichconf l
i
ctswit
hmor alsoftheti
me
andcontrav
enesanyest abl
ishedi
nterestofsociet
ymaybesai dt obeopposedtopublicpoli
cy.
InIndi
a,i
thasbeenlefttothecour
tt oholdanycontractasunlawfulonthegroundofbeing
opposedtopubl
icpol i
cy.
WhatConsi
der
ati
onsandObj
ect
sar
eUnl
awf
ul?:
Accordi
ngtoSecti
on23,ev
eryagr
eementofwhichtheobj
ectorconsi
derat
ionisunlawf
ulis
voi
d,andtheconsi
der
ati
onortheobj
ectofanagreementi
sunlawfuli
nthefol
lowingcases:
(1)I
fiti
sforbiddenbylaw:Thisclauserefer
stoagr
eementswhi
charedecl
aredil
legal
bylaw.
I
ftheconsi
derati
onorobj
ectf
orapromi seissuchi
asisf
orbi
ddenbyl
aw,theagreementisv
oid.
Anactoranundertaki
ngi
sfor
biddenbylaw:
(
a)wheni
tispuni
shabl
ebyt
hecr
imi
nal
lawoft
hecount
ry,
or
(b)wheniti
sprohi
bit
edbyspeci
all
egisl
ati
onorr
egul
ati
onsmadebyacompet
entaut
hor
it
y
underpowersderi
vedfr
om t
helegi
slat
ure.
I
ll
ust
rat
ions:(
a)Agr
eement
sforsal
eorpur
chaseabov
ethest
andar
dpr
icef
ixedbyt
he
r
elevantl
aw(e.g.
,Essent
ial
Commodit
iesAct,1955)wi
thr
egar
dtoacont
rol
l
edar
ti
clesar
e
i
l
legalandhencevoid(Si
taRam v
sKunjLalcase).
(b)Anagreementtopayconsi
derat
iontoatenantt
oinducehi
mt ovacatepr
emisesgover
ned
bytheRentRestr
ict
ionActi
sil
legalandcannotbeenf
orcedbecausesuchanacti
sforbi
ddenby
thesai
dAct(MohanchanaVsMahi ndracase)
.
2)I
( fiti
sofsuchanat
uret
hat
,ifper
mit
ted,
itwoul
ddef
eatt
hepr
ovi
sionsofanyl
aw:
Thi
sclausereferst
ocaseswheret heobjectorconsi
derat
ionofanagr
eementi
sofsucha
nat
urethat,t
houghnotdi
rect
lyforbiddenbylaw,itwoul
dindir
ect
lyl
endtoavi
olati
onoflaw,
whetherenactedorot
her
wise(e.g.
, HinduandMohammedanLaws) .Suchanagreementisal
so
voi
d.
I
ll
ust
rat
ions:(
a)Anagr
eementbyt
hedebt
ornott
ori
set
hepl
eaofl
i
mit
ati
on,
shoul
dasui
t
havet
obefil
ed,i
svoi
dast
endi
ngt
oli
mitt
hepr
ovi
sionsoft
heLi
mit
ati
onAct(
RamaMur
thyv
s
Gapay
yacase).
(
b)Anagr
eementbet
weenhusbandandwif
etolivesepar
atel
yisi
nval
i
dasbei
ngopposedt
o
Hi
nduLaw(A.
E.Thi
mmalNaiduvsRajammalcase).
(3)Ifi
tisfr
audulent:Anagr
eementwhoseobj
ectorconsi
der
ati
oni
stodef
raudot
her
s,i
s
unlawf
ulandhencevoid.
I
ll
ust
rat
ions:(
a)A,
promi
sest
opayRs200t
oB,
ifBwoul
dcommi
tfr
audonC.Bagr
ees.B'
s
agr
eei
ngtodef
raudi
sunl
awf
ulconsi
der
ati
onf
orA'
spr
omi
set
opay
.Hencet
heagr
eementi
s
i
ll
egal
andvoi
d.
(b)A,BandCenterint
oanagr eementf
orthediv
isi
onamongthem ofgai
nsacquir
edortobe
acqui
red,byt
hem byfraud.Theagr
eementisvoi
d,asi
tsobj
ecti
sunlawful
.[I
ll
ust
rati
on(
e)to
Secti
on23].
(4)Ifiti
nvolvesorimpli
esinj
uryt
ot heper
sonorproper
tyofanother:Iftheobj
ector
consider
ationofanagr
eementi
sinj
urytot
heper
sonorpr
oper
tyofanot
her,
itisvoi
d,bei
ngan
unlawfulagreement
.
I
ll
ust
rat
ions:(
a)Anagr
eementt
ocommi
tanassaul
tort
obeatamanhasbeenhel
dunl
awf
ul
andv
oid(
All
env
sRescouscase)
.
(
b)Anagr
eementt
oputcer
tai
npr
oper
tyt
ofi
rei
sunl
awf
ulandv
oidundert
hiscl
ause.
5)I
( ft
hecourtregardsitasimmoral:Anagreementwhoseobj
ectorconsi
der
ati
oni
s
i
mmoral,
isi
l
legalandther
efor
evoi
d.Thescopeofthewor
d' i
mmoral'
hereext
endstot
he
f
oll
owi
ng:
(
i)Sexual
immor
ali
tye.
g.,
il
li
citcohabi
tat
ionorconcubi
nageorpr
ost
it
uti
on.
I
ll
ust
rat
ions:(
a)A,
agr
eest
oletherdaught
ert
ohi
reBf
orconcubi
nage.Theagr
eementi
svoi
d,
becauseiti
simmoral
,thought
hel
ett
ingmaynotbepuni
shabl
eundert
heI
ndi
anPenal
Code.
[
Il
lust
rati
on(k)t
oSecti
on23].
(
b)Agif
tdeedexecut
edi
nconsi
derat
ionofil
li
citi
nter
cour
sehasbeenhel
dvoi
dasi
tsobj
ect
wasi
mmor al
(GhummavsRam Chandracase).
I
tmaybenot
edt
hatanagr
eementt
opayf
or'
past
'or'
fut
ure'
il
li
citcohabi
tat
ioni
sal
sov
oid,
as
beingimmoral.Considerati
onwhichisimmor alatthetimewheni tpassescannotbecome
i
nnocentbypassageoft imeandt her
eforetheconsi derati
onforpastcohabi
tati
onisunlawf
ul
asbeingi
mmor al(Hussenaliv
sDi nbaicase).Si
mi l
arly,
apr omisetopayforthepurposeof
futur
ecohabit
ation,whichcompr i
sedtheconsi derati
on, washeldil
l
egalandv oi
d
(Lakshmi
narayanav sSubhadri).
(
ii
)Fur
ther
anceofsexual
immor
ali
ty
I
ll
ust
rat
ions:(
a)Apr
ost
it
utewassuedf
ort
hehi
remoneyofacar
ri
agei
nwhi
chsheusedt
o
goeveryeveni
nginordertomakeadispl
ayofherbeautyandt hustoatt
ractt
hecust
omers.The
sui
twasdismissedont hegr
oundthatt
heplai
nti
ffcontr
ibutedtowardstheper
for
manceofan
i
mmor alandil
l
egalactandhencehewasliabl
etosuffer(PearcevsBrookscase)
.
(b)Amanwhoknowi ngl
yletsouthishouseforpr
osti
tut
ioncannotrecov
ertherent
,itbei
ngan
actforfurther
anceofsexualimmor al
it
y(ChogaLalv
sPiy asi
case).Thel
andlor
dmay ,however
,
recoverifhedidnotknowt hepurpose.
(
ii
i)I
nter
fer
encewi
thmar
it
alr
elat
ions
I
ll
ust
rat
ions:(
a)Moneyadv
ancedt
oamar
ri
edwomant
oenabl
ehert
opr
ocur
eadi
vor
ceand
t
omar
ryt
heplai
nti
ffcoul
dnotberecov
eredbackast
heobj
ectoft
heagr
eementwashel
d
i
mmor
al(
BaiVij
l
ivsNansaNagarcase).
(
b)Anagr
eementforf
utur
esepar
ati
onbet
weenahusbandandwi
fei
svoi
dabi
nit
ioi
tbei
ng
i
mmorali
ntheey
eoflaw.
(
iv)Suchact
swhi
char
eagai
nstgoodpubl
i
cmor
als.
I
ll
ust
rat
ions:Anagr
eementf
orf
utur
emar
ri
age,
aft
ert
hedeat
hoff
ir
stwi
fei
sagai
nstgood
mor
alsandhencewoul
dbev
oid(
Wil
sonv
sCar
nleycase)
.
(6)Ifthecourtregar
dsitas'opposedtopubli
cpoli
cy':Anagr
eementisunlawfulift
hecourt
regardsitas'opposedtopubli
cpolicy
'.Iti
snotpossi
bletogi
veapreciseorexactdefi
nit
ionof
theterm' publi
cpoli
cy'
.Onthebasisofdecidedcasesonthesubj
ectthefol
lowingagreements
havebeenhel dt obeagai
nstpubli
cpolicy:
(
i)Tr
adi
ngwi
thanal
i
enenemy
(
ii
)Agr
eement
sint
erf
eri
ngwi
tht
hecour
seofj
ust
ice
(
ii
i)Agr
eement
sforst
if
li
ngcr
imi
nal
prosecut
ion
(
iv)Mai
ntenanceandchamper
ty
(
v)Tr
aff
ici
npubl
i
cof
fi
ces
(
vi)Agr
eement
scr
eat
ingani
nter
estopposedt
odut
y
(
vii
)Agr
eement
sundul
yrest
rai
ningper
sonal
li
ber
ty
(
vii
i
)Agr
eement
sint
erf
eri
ngwi
thpar
ent
aldut
ies
(
ix)Mar
ri
agebr
oker
ageagr
eement
s
(
x)Mi
scel
l
aneouscases
Ref
erences:
1)Busi
nessLaw(
6thedi
ti
on):
MCKuchhal
andVi
vekKuchhal
(Vi
kasPubl
i
shi
ngHouse,
Noi
da)
2)I
ndi
anCont
ractAct(
12t
hedi
ti
on):
RKBangi
a(Al
l
ahabadLawAgency
,Far
idabad)
3)I
ndi
anCont
ractAct(
12t
hedi
ti
on):
Avt
arSi
ngh(
East
ernLawAgency
,Noi
da)
