Circumstances in which consideration of a contract deemed unlawful
An agreement will not be enforceable if its objects (or) the consideration are unlawful. According to a section, of the 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. (or)
- It is prohibited by special legislation and regulations made by the competent authority under power derived from the legislature.
2. If it 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.
3. If it is fraudulent: An agreement, whose object (or) consideration is to defraud others, is unlawful and hence it becomes void.
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.
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.
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.