What is legality of object and consideration?

Section 23 of The Indian Contract Act states that for a contract to be valid, there must be the legality of object and consideration. The object is the purpose for which the parties enter into a contract. The fulfilment of the object leads to the transfer of the consideration agreed from one party to the other.

Under what cases can consideration and object be unlawful?

Unlawful consideration of object includes acts that are specifically punishable by the law. This also includes those that the appropriate authorities prohibit via rules and regulations. But if the rules made by such authorities are not in tandem with the law than these will not apply.

When consideration or object is forbidden by law?

Forbidden by law When the object of the contract or the consideration is prohibited by law, those consideration or objects are not lawful anymore. They become illegal. And so any such contract can no longer be valid. The unlawful consideration of the object includes acts that are specifically punishable by law.

Is illegal consideration a valuable consideration?

No. Illegal consideration is merely a personal defense which cannot be raised against a holder in due course. In this case, Elena is a holder in due course because she received the instrument for value and without notice of any defect in the title of the person negotiating the instrument.

What is the legality of an object and consideration?

should be lawful. Every agreement of which the object or consideration is unlawful is void. agreement is not lawful. 1. It is forbidden by law, or 5. the Court regards it as immoral or opposed to public policy. 1. Forbidden by Law When something is forbidden by law, an agreement to do that is unlawful. An other law cannot be enforced. enforceable.

When is the consideration or object of an agreement unlawful?

In the following cases, the consideration or object of an agreement is unlawful: 1) it is forbidden by law; or 2) is of such a nature that, if permitted, it would defeat the provisions of any law; or 3) is fraudulent; or 4) involves or implies injury to the person or property of another; or

What is the legality of the object in a contract?

Let’s look into the parameters under the legal object contract law that define what is a lawful object and consideration. The legality of the object in contract law stipulates that the consideration and the object of a contract are considered legal except when: They are specifically forbidden by law. They are fraudulent in nature.

What is legality object and consideration in Indian contracts?

Section 10 (Indian Contracts Act) states that all agreements are contracts if made for lawful considerations and with lawful object. Considerations should be lawful, as otherwise, it would vitiate the whole contract and make it void. For example, A promises to pay B Rs 500/- if he commits a theft in C’s house.