Legality of Object: The Indian Contract Act of 1872, specifically in Section 23, focuses on three key aspects: the consideration for the agreement, the purpose of the agreement, and the core provisions of the agreement. When it comes to making agreements, Section 23 places certain restrictions on an individual’s freedom, subjecting their rights to the conditions mentioned in the section and the broader considerations of public policy. Additionally, Section 264 is relevant to Section 23. This means that while entering into agreements, individuals need to be mindful of these factors to ensure that their contracts align with legal requirements and are not contrary to public policy.
Table of Contents
Introduction of Legality of Object
The term “object” as used in Section 23 suggests and denotes “purpose” rather than importance in the same sense as “consideration” and therefore does not imply importance. As a result, even if an agreement’s consideration is true and legal, if the goal (object) of the agreement is illegal, the agreement will still be illegal. Since Section 23 is not motivated by thinking or motivation, it restricts the courts to the essential purpose of the exchange or transaction and not to the factors that contributed to it.
Lawful Object
According to the rules of contract law, the consideration and the object of a contract are both regarded as legal unless −
Forbidden by the Law
If a contract includes something illegal or involves a forbidden exchange, it’s considered void. Legally sanctioned illegal acts refer to actions that are deemed unlawful in the context of the contract. When determining the legality of an action, we look at the laws and regulations set by the relevant authorities. However, if these rules clash with the law, they may not be applicable. A contract becomes void if it contains a clause prohibited by law, but it’s essential to note that not all void contracts necessarily involve unlawful activities.
Fraudulent in Nature
Contracts that have deceptive terms for their object or consideration are null and invalid.
Defeats the Purpose of the Law
If someone tries to make a deal with the goal of breaking the law, the agreement won’t hold up. There are a few situations where a contract becomes invalid:
- If the whole point of the contract is to do something illegal.
- If what the contract is about is explicitly or secretly against the law.
- If carrying out the contract means you have to break the law.
So, basically, if a deal involves illegal stuff or goes against the law in any way, it’s not going to work out.
Involves injury or harm to another person or property
The goal of the contract is to ensure that no harm or damage occurs to anyone else because of what we’re doing. We want to make sure that our actions don’t cause any problems for other people or their belongings. It’s all about keeping things friendly and looking out for everyone’s well-being.
Immoral as Per Law
The agreement won’t be considered invalid if its purpose and/or what’s being exchanged are deemed immoral. Immoral actions are those that go against what most people would consider reasonable and proper in how we interact with each other or conduct ourselves.
Against the Public Policy
In the world of corporate law, a legit deal is one that plays nice with public policy. Public policy is like the superhero cape for everyone’s well-being, making sure it doesn’t step on anyone’s toes. Now, there are some contract troublemakers that are a big no-no:
- Making deals with folks from countries not on our friendship list? That’s a deal-breaker, literally.
- You can’t sign away your right to cry for legal help. No deals to hush up legal cries.
- Ever heard of Maintenance and Champerty? It’s like supporting your friend’s lawsuit when you have zero skin in the game. And Champerty is like becoming a legal sidekick for a slice of the damages pie.
- Turning public offices into trading cards? Nope, not allowed.
- Monopolies are a hard pass. No contracts to rule the playground.
- Brokering unions for cash? Sorry, not a legit paycheck.
- Trying to bribe the government or legal folks? Yeah, that’s a one-way ticket to contract cancellation.
Trading with the Enemy
An agreement struck during a conflict with an unknown adversary without the approval of the Indian government is considered illegitimate as it contradicts civil policy. When war is declared, it leads to a commercial embargo and a ban on interactions with citizens of the opposing side. The harmful impact on global trade is a natural consequence of a hostile world.
Conclusion
It is impossible to overstate how crucial object validity is to the success of a deal. The agreement is null and void if both the object and the consideration are unlawful. We acknowledge that our efforts to pursue our rights under this Agreement in a court of law will be futile until further notice unless our agreement is subject to the requirements of Sections 10, 23, and 24 of the Indian Contract Act, 1872.
This is since a covenant like that would not be considered sacrosanct by the law. To avoid being left without legal recourse in the event of a collision, we must take care when entering into agreements to make sure they are not just “agreements,” but rather comply with the law.
Read Also: Consent and all its related concepts in Law of Contracts
