LEGALITY OF OBJECT &
CONSIDERATION
Dr. Gaurav Varshney Assistant Professor
Faculty of Law, AMU, Aligarh
Requirement of A Valid Contract
• LEGALITY: Defined as “Confirmity to the Law”.
Therefore, the Legality of Object & Consideration for a Contract means that it must be Lawful.
• Section 10: All Agreements are Contract if they are made for LAWFUL CONSIDERATION & with LAWFUL OBJECT.
• Section 23: Every Agreement of which the OBJECT or CONSIDERATION is UNLAWFUL is VOID.
• The Combined effect of BOTH Sections is that a Contract
is Valid & Enforceable only if it is made for a Lawful
Consideration & with Lawful Object.
Section 23: What Considerations & Objects are Lawful & What Not
The Consideration or Object of an Agreement is Lawful, Unless:
1. It is Forbidden by Law,
2. Is of Such a Nature that, if permitted, it would defeat the provisions of any Law; or is Fraudulent,
3. Involves or implies, injury to the person or property of another,
4. Court regards it as immoral or opposed to public policy.
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.
CASE LAWS
1. Amrit Vanaspati Vs State of Punjab AIR 1992 SC 1076
Where Government was in contravention of public purpose thus held to be violative of Public Policy under section 23.
2. Nutun Kumar Vs II Additional District Judge Banda AIR 1994 All 298
The Distinction between illegal & Void Contracts is very THIN but it is there. The Law may either forbid an
agreement to be made, or it may merely say that if it is made the court will not enforce it. In the former case it is illegal in the latter case it is void.
Doctrine of Public Policy
• Is the principle of law which hold that no person can lawfully act in such a way which has a tendency to be injurious to the public at large or society or public welfare.
• KINDS: 1.Trading with Enemy 2. Trafficking in Public Offices (Agreement which affects the normal working of government offices)
• Criticism : No Exact Definition of Public Policy
Central Inland Water Transport Corporation Vs Brojo Nath AIR 1986 SC 1571
Courts can always be guided by the Fundamental Rights & the Directive Principle of the State Policy enshrined in the Constitution.
