Sunday, 7 August 2011

Distinguish or Difference between lawful and unlawful consideration or Explain the courses of unlawful consideration

"An agreement is a contract enforceable only if it is made for a lawful consideration and with a lawful object."
For the valid agreement it is essential that the object and consideration of agreement must be lawful. If contract is unlawful due to any reason the agreement is illegal.

Example :- Mr. James takes the car from Miss. Nishi on rent. There is nothing unlawful in this case. If he uses the car for smuggling. This object is unlawful and agreement is void.

Contract act explains the causes of unlawful consideration. In this situation object of an agreement is unlawful.


1. Prohibited By Law :-
If it is forbidden by law then it will be unlawful consideration.

Example :- Business of smuggling is prohibited in law. If any person makes an agreement with other in this regard. The agreement is void as the consideration is forbidden by law.

2. Case of Fraudulent :-
If the object of agreement is unlawful and based on fraud then consideration is also unlawful.

Example :- Mr. Zain and Mr. Arjun enter into an agreement that they will divide money acquired by fraud equally among themselves. This object is unlawful so agreement is void.

3. Immoral :-
In case of immoral object agreement is void and cannot be enforced.

Example :- Mr. James agrees to let his daughter to hire to Mr. Shah for concubinage. The agreement is void because it is immoral.

4. Injury To Other Person or Property :-
If an agreement involves an injury to the person or property of another it is void.

Example :- Mr. Ali asks Mr. Noor to beat Mr. Khan and promises to pay Rs. 10,000 for this work. The agreement between Mr. Ali and Mr. Noor is void at it involves injury to the other person Mr. Khan. Therefore suit cannot be filed by Mr. Noor to recover Rs. 10,000.

5. Against the Public Policy :-
In this case also the object or consideration of an agreement is said to be unlawful. There are certain classes of acts which are said to be against the public policy.

Example :- Mr. Nasir promises to obtain for Mr. Agah an employment in public service and Mr. Agha promises to pay Rs. 10, 000 to Mr. Nisar.
This act of Mr. Nisar is against the public policy. A private man cannot give a public service to any person. So agreement is void.

6. Nature of Agreement :-
The consideration or object of an agreement is unlawful if it is of such nature that if permitted it would defeat the provisions of law.

Note :- If the consideration is unlawful the contract shall be void.


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