A lawful object (end) must be accomplished by lawful
means (lawful consideration).

There may be free consent, parties may be competent,
consideration may also be lawful, but if the very purpose of agreement is
unlawful or illegal, the agreement is void.

Thus, consideration or object of an agreement is
considered lawful unless

    a)     It is forbidden by
law

    b)     It is of such nature
that if permitted, it would defeat the provisions of any law or is fraudulent.

    c)     It involves or
implies injury to the person or property of another.

    d)     The court regards it
as immoral or opposed to public policy.

   

a)     
If it is forbidden by law:-

    An agreement for sale/purchase of a controlled article above the
standard price fixed by the relevant law

b)    
If it is of such a nature that, if permitted, it would
defeat the provisions of any law:-

Hakim gives a loan of Rs 2 lakhs to Mr. Khan to
celebrate his minor daughter’s marriage. In this case, giving a loan is lawful,
but the purpose for which it is given is unlawful. [As it is against the Child
marriage restraint Act]

c)     
If it is fraudulent:-

    Pinto and Zora agree to cheat Mr. Henry and share the gains
equally.     

d)    
If it involves injury to a person or property of
another:-

Santosh agrees to set important files belonging to
Mukesh on fire provided Rajneesh pays him Rs. 50000/- The contract between
Santhosh and Rajneesh is void.

e)     
If the Court regards it as immoral:-

    An agreement, whose object or consideration is immoral, is
illegal and therefore void.

f)      
If the Court regards it as opposed to public policy:-

    An agreement is unlawful, if the court regards it as opposed to
public policy.

Public policy is that principle of law, which holds
that no citizen can lawfully do that which is injurious to the public or is
against the interest of the society or the State.

    Examples of Agreements against public
policy.

     Agreement
creating an interest opposed to duty.

     Agreements
interfering with the course of justice

     Trading
with an alien enemy

Void Agreements:

“An agreement not enforceable by law is said to be
void” [Sec.2(g)].

Thus a void agreement does not give rise to any legal
consequences and is void ab-initio. In the eye of law such an agreement is no
agreement at all from its very inception.

Following are agreements declared to be void: –

    a)     Agreements
in restraint of marriage

    Under the Contract Act, an agreement in restraint of the marriage
of any person other than a minor is void.

Example: A promised to marry B only and nobody else, and in
default to pay Rs 50,000. A however married C and B sued A for recovery of Rs
50,000. Held, B could not recover the amount as the agreement was in restraint
of marriage.

b)     An
agreement where in a person is restrained from pursuing a lawful profession,
trade or business of any kind, is to that extent void.

    Note: There are some important exceptions under this rule.

 An agreement of service by which a person binds
himself, during the term of the agreement, not to take service with anyone
else, is not in restraint of lawful profession and is valid.

 An agreement between traders in the same locality
not to sell their products below a particular price is valid.

    c)     Agreements in restraint of legal
proceedings:

 An agreement by which a party is restricted absolutely from taking usual legal
proceeding in respect of any rights arising from a contract is void.

Or

 An agreement which limits the time within which one
may enforce his rights ignoring the provisions of the Limitation Act is void.

    d)     Agreement
the meaning of which is uncertain is void.

Example: A agrees to pay Rs 1,00,000 when he is in a position
to pay. The agreement is void for its uncertainty.

    e)     Wagering
agreements are void

An agreement between 2 persons under which money or
money’s worth is payable by one person to another on the happening or
non-happening of a future uncertain event is called a wagering event. Such
agreements are chance-oriented and therefore, completely uncertain.

Example: A agrees to pay Rs 10,000 to B if India wins a cricket
match.

    f)     Agreement
to do impossible acts is void.

    Example: Prona agrees
to put life into the body of a dead horse in return for Rs.5 lakhs.

    g)     Agreement
contingent on impossible events.

Example: Rakesh promises Tarun to a
give a loan of Rs. 10 lakhs, if the latter marries his sister, Rekha.
However, Rekha is dead at the time of agreement. The agreement is void.

Practice Exercise:

1.  There may be free consent,
parties may be competent, consideration may also be lawful, but if the very
purpose of agreement is unlawful or illegal, the agreement is

A. Valid

B.  Voidable

C. Void

D. None of the above

Ans: C

2. Consideration or object of an agreement is considered lawful unless

A. It is forbidden by law

B. It involves or implies injury to the person or property of another

 C. The court regards it as
immoral or opposed to public policy

D. All of the above

Ans: D

3. Hakim gives a loan of Rs 2 lakhs to Mr. Khan to celebrate his minor
daughter’s marriage. Is this valid

A. Yes. Giving a loan is not unlawful

B. No. Giving loans is unlawful

C. No. Giving loans for the marriage of a minor is unlawful.

D. All of the above    

Ans:  C

4. Akash and Amrita decide to cheat on Mrs. Maya and divide the gains
equally.

A. Valid

B. Void

C.  Voidable           

D. None of the above

Ans: B

5.  An agreement whose object or
consideration is immoral; is illegal and therefore void. True or False

A. True

B. False

C. Maybe

D. None of the above

Ans: A

6. Agreements against public policy are

A.  Agreement creating an interest
opposed to duty

B. Agreements interfering with the course of justice

C.  Trading with an alien enemy

D. All of the above

Ans: D

7. Sec. 2(g) of The Indian Contract Act deals with

A. Acceptance

B. Consideration

C. Void Agreements

D. None of the above

Ans: C

8. Agreements in restraint of marriage are

A. Void      

B. Voidable

C. Valid

D. None of the above

Ans: A

9. An agreement between traders in the same locality not to sell their
products below a particular price is

A. Void      

B. Voidable

C. Valid

D. None of the above

Ans: C

10. An agreement of service by which a person binds himself, during the
term of the agreement, not to take service with anyone else, is not in
restraint of lawful profession and is

A. Void      

B. Voidable

C. Valid

D. None of the above

Ans: C

11. An agreement by which a party is restricted absolutely from taking
usual legal proceeding in respect of any rights arising from a contract is

A. Void      

B. Voidable

C. Valid

D. None of the above

Ans: A

12. An agreement which limits the time within which one may enforce his
rights ignoring the provisions of the Limitation Act is

A. Void      

B. Voidable

C. Valid

D. None of the above

Ans: A

13. Prona agrees to put life into the body of a dead horse in return for
Rs.5 lakhs. Is this valid?

A. No

B. Yes

C. Maybe

D. None of the above

Ans: A

14. Agreement the meaning of which is uncertain

A. Void      

B. Voidable

C. Valid

D. None of the above

Ans: A

15. A agrees to pay Rs 10,000 to B if India wins a cricket match. Is
this valid?

A. No

B. Yes

C. Maybe

D. None of the above

Ans: A