Important cases lay down by Sec. 23 where consideration or objects of an agreement are unlawful are given below:
1. If it is forbidden by law:
If the consideration or the object of an agreement is the doing of an act, forbidden by law, the agreement is void. The act may be forbidden either under the Indian Penal Code or by special legislation or regulations made by a competent authority.
Under Sec. 23, words ‘consideration’ and ‘object’ have not been used as synonyms. Object means the purpose and design. In some cases, consideration for an agreement may be lawful, but the purpose for which the agreement was entered into may be unlawful.
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ADVERTISEMENTS:
However, the agreement would be void. Therefore, both the consideration and object of an agreement must be lawful; otherwise the agreement would be void.
2. If it is of such a nature that, if permitted, it would defy the provisions of Law:
If the consideration or object of an agreement is of such a nature that it would defeat the provisions of any statutory law, the agreement is void.
3. If it is fraudulent:
An agreement with the object to defraud other is void.
4. If it involves or implies injury to the person or property of another:
If the object of an agreement is to cause injury to the person or property of another, it is void.
5. If the Court regards it immoral or opposed to Public Policy:
An agreement, consideration or object of which is immoral or opposed to public policy, is void.
Immoral Agreements:
An agreement is unlawful for immorality in either of the following cases:-
(i) Case of sexual immorality, e.g., illicit cohabitation or prostitution; or
(ii) Furtherance of sexual immorality, e.g., financial help to a prostitute for improving her trade.
Doctrine of public policy:
An agreement is said to be opposed to public policy, when it hurts the public welfare. It is a rule of law that no person shall do anything which is not for the good of the community. It is a tough task to define public policy as it is a complex term.
ADVERTISEMENTS:
In a case [Lord Truro Vs. Brownlow (1853) 4 H. L. Cas. 1] public policy is defined as, “That principle of law which holds that no subject can lawfully do that which has a tendency to be injurious to the public, or against the public good which may be termed the policy of the law, or public policy in relation to the law.”