Lawful Consideration and Lawful Object

(S. 23)
Consideration or object of an agreement is lawful, unless:
• It is forbidden by law, or
• It is of such a nature that, if permitted, it would defeat the
provisions of any law, or (Nandlal v Thomas J William)

Samiuddin, Contract Law I

• It is fraudulent, or
• It involves or implies injury to the person or property of
another, or
• The court regards it as immoral or opposed to public policy

Every agreement of which the object or consideration is

unlawful is void.
Based on maxim Ex turpi causa non oritur actio.
 Public Policy
An agreement is unlawful if the court regards it as opposed to
public policy.
Richardson v Mellish, Burrough J; – Public Policy is an unruly
horse.
State of Rajasthan v Govind Nahata– Judiciary to decide what is
public policy

Samiuddin, Contract Law I

Gherulal Parekh v Mahadeodas Maiya, Subba Rao J;– ‘public
policy should only be invoked in clear and incontestable cases of
harm to the public.
Ratan Chand Hira Chand v Asghar Nawab– twin touchstone of
public policy are—
• Advancement of public good
• Prevention of public mischief
Examples of Public Policy
• Trading with enemy alien
• Trafficking in public office (Parkinson v College of Ambulance,
Mahendra Kumar Nandy v Ashwini Kumar)
• Interference in administration of justice
--- withdrawal of criminal prosecution (except S. 320 CrPC and
chapter 21A CrPC)

Samiuddin, Contract Law I

Sati Bhagwandas Shashtri v. Raja Ram
--- Maintenance and Champerty
Ramswaroop v Court of Wards
Ramkumar Kundu v Chndra Kanto
--- Marriage Brokerage Contract
Section 24
Agreements void, if considerations and objects unlawful in part.
—If any part of a single consideration for one or more objects,
or any one or any part of any one of several considerations for a
single object, is unlawful, the agreement is void.

Samiuddin, Contract Law I