For a contract to be enforceable, the object and consideration must be lawful. If the purpose is illegal or opposed to public policy, the agreement becomes void or illegal. The Contract Act also declares certain agreements as void (like wagering). This topic covers lawful object, void agreements, contingent contracts and wagering agreements—frequently asked in exams.
An agreement must have:
If either is unlawful, the agreement is void/illegal as per law.
Object/consideration is unlawful if it is:
Public policy refers to matters considered harmful to public welfare. Examples commonly cited in textbooks include:
A void agreement is an agreement that is not enforceable by law. Some agreements are void from the beginning; some become void later.
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For a contract to be enforceable, the object and consideration must be lawful. If the purpose is illegal or opposed to public policy, the agreement becomes void or illegal. The Contract Act also declares certain agreements as void (like wagering). This topic covers lawful object, void agreements, contingent contracts and wagering agreements—frequently asked in exams.
An agreement must have:
If either is unlawful, the agreement is void/illegal as per law.
Object/consideration is unlawful if it is:
Public policy refers to matters considered harmful to public welfare. Examples commonly cited in textbooks include:
A void agreement is an agreement that is not enforceable by law. Some agreements are void from the beginning; some become void later.
A contingent contract is a contract to do or not to do something depending on the happening or non-happening of an uncertain future event, which is collateral to the contract.
Example: insurance contract—payment depends on occurrence of insured event.
Key exam points:
A wagering agreement is an agreement in which two parties agree that on the happening or non-happening of an uncertain event, one shall win and the other shall lose, and each party has a chance of winning or losing.
Wagering agreements are void (as per general contract law treatment in syllabus).
If an agreement is illegal/unlawful, it affects connected (collateral) transactions also. This is an important exam distinction from merely void agreements in some contexts.
From this topic
Object/consideration is unlawful if (any three):
(Also: defeats provisions of law, causes injury, immoral.)
Examples of void agreements (any three):
(Also: restraint of trade, restraint of legal proceedings, wagering.)
For a contract to be valid, its object (purpose) and consideration (something in return) must be lawful. If either object or consideration is unlawful, the agreement becomes void/illegal and cannot be enforced.
Thus, lawful object and consideration protect society and ensure only legitimate business transactions are enforceable.