Lawful object & consideration

Tulika Sinha
UMU
Under what circumstances is the object (or) consideration of a contract deemed unlawful?
Illustrate with examples?

Ans: Meaning: - Consideration is a technical term used in the sense of quid-pro-quo i.e..,
something in return). When a party to an agreement promises to do something, he must get
something in return. This “something” is defined as consideration. An agreement will not be
enforceable if its objects (or) the consideration are unlawful. According to Indian contract Act,
1872.

The consideration and objects are unlawful in the following cases:

1. If it is forbidden by law: If the object (or) the consideration of an agreement is forbidden

by law, in such a case the agreement is deemed to be unlawful and void. An act is
forbidden by law if, It is punishable under the criminal law of the country.It is prohibited
by special legislations and regulations made by competent authority under power
derived from legislature.
a. Example: ‘A’ promises to obtain for ‘B’ an employment in the public service and
‘B’ promises to pay Rs.1000/- to ‘A’. The agreement is void, as the consideration
for it is unlawful.
2. If it is defeats the provision of any law: If the object (or) consideration of an agreement
is of such a nature that, though not directly forbidden by law, it would defeat the
provisions of the law, in such a case the agreement is deemed to be unlawful and void.
a. Example: An agreement between husband and wife to live separately is invalid
as being opposed to Hindu law.
3. If it is fraudulent: An agreement, whose object (or) consideration is to defraud others, is
unlawful and hence it becomes void.
a. Example: ‘A’, ‘B’, ‘C’ enters into an agreement for division among them of gains
acquired (or) to be acquired, by them by fraud. The agreement is void, as its
object is unlawful.
4. If it involves (or) implies injury to the person (or) property of another: If the object (or)
consideration of an agreement is to injure the person (or) property of another is void. In
such a case object (or) the consideration is deemed to be unlawful.
a. Example: Ram Saroop (vs) Bansi Mandar (1915): Facts: “B” borrowed Rs.100
from “L’ and executed a bond promising to work for “L” without pay for a period
of two years. In case of default, “B” was to pay interest (at a very exorbitant rate)
 and the principal amount at once. Judgment: The contract was void as it involves
injury to the person of “B”.
5. If the court regards it as immoral: An agreement, whose consideration and object is
immoral, is deemed to be illegal and void. The word immoral includes sexual immorality.
Hence its object (or) consideration is unlawful.
a. Example: Pearce (vs) Brooks (1866): Facts: A firm of coach-builders hired out a
carriage to a prostitute, knowing that it was to be used by prostitute to attract
men. Judgment: The coach-builders could not recover the hire as the agreement
was unlawful.
6. Where the court regards it as opposed to public policy: An agreement whose
consideration (or) object is such a nature that opposed to public policy. Thus it becomes
void and it deemed to be unlawful.