Dr Gaurav Varshney Assistant Professor Faculty of Law AMU Aligarh Requirement of A Valid Contract LEGALITY Defined as Confirmity to the Law Therefore the Legality of Object amp Consideration for a Contract means that it must be Lawful ID: 1003395
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1. LEGALITY OF OBJECT & CONSIDERATIONDr. Gaurav VarshneyAssistant ProfessorFaculty of Law, AMU, Aligarh
2. Requirement of A Valid ContractLEGALITY: Defined as “Confirmity to the Law”. Therefore, the Legality of Object & Consideration for a Contract means that it must be Lawful.Section 10: All Agreements are Contract if they are made for LAWFUL CONSIDERATION & with LAWFUL OBJECT.Section 23: Every Agreement of which the OBJECT or CONSIDERATION is UNLAWFUL is VOID.The Combined effect of BOTH Sections is that a Contract is Valid & Enforceable only if it is made for a Lawful Consideration & with Lawful Object.
3. Section 23: What Considerations & Objects are Lawful & What Not The Consideration or Object of an Agreement is Lawful, Unless: 1. It is Forbidden by Law, 2. Is of Such a Nature that, if permitted, it would defeat the provisions of any Law; or is Fraudulent, 3. Involves or implies, injury to the person or property of another, 4. Court regards it as immoral or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is VOID.
4. CASE LAWS 1. Amrit Vanaspati Vs State of Punjab AIR 1992 SC 1076 Where Government was in contravention of public purpose thus held to be violative of Public Policy under section 23. 2. Nutun Kumar Vs II Additional District Judge Banda AIR 1994 All 298 The Distinction between illegal & Void Contracts is very THIN but it is there. The Law may either forbid an agreement to be made, or it may merely say that if it is made the court will not enforce it. In the former case it is illegal in the latter case it is void.
5. Doctrine of Public PolicyIs the principle of law which hold that no person can lawfully act in such a way which has a tendency to be injurious to the public at large or society or public welfare. KINDS: 1.Trading with Enemy 2. Trafficking in Public Offices (Agreement which affects the normal working of government offices)Criticism : No Exact Definition of Public Policy Central Inland Water Transport Corporation Vs Brojo Nath AIR 1986 SC 1571 Courts can always be guided by the Fundamental Rights & the Directive Principle of the State Policy enshrined in the Constitution.
6. Cases of Unlawful Object & ConsiderationWhere it is Forbidden by LawWhere it defeats the Provisions of any LawWhere it is FraudulentWhere it is injurious to another person or his propertyWhere it is regarded as Immoral Where it is opposed to Public Policy