LAWFUL CONSIDERATION AND OBJECTS

LAWFUL CONSIDERATION AND OBJECTS

Under the Indian Contract Act, Lawful Consideration and Objects play a crucial role in forming a valid contract. 

LAWFUL CONSIDERATION :

1. Consideration : It refers to something of value that is given by one party to another as part of the contract. For a contract to be valid, both parties must provide consideration.
2. Lawful Consideration : It means the consideration must be lawful and not forbidden by law or against public policy. It should also not involve any fraudulent or illegal activities.
3. Adequacy of Consideration : The Act does not require the consideration to be of equal value but emphasises that it must be sufficient and real.

LAWFUL OBJECTS :

1. Lawful Object : The object of a contract must be lawful and not contrary to any law or public policy.
2. Not Forbidden by Law : The object of the contract should not involve any activity that is forbidden by law, whether it is explicitly stated or implied.
3. Not Fraudulent or Involving Injury to Others : The object of the contract should not be fraudulent or cause harm to others. It should be fair and ethical.

UNLAWFUL CONSIDERATION AND OBJECTS  :

If the Consideration or Object of a Contract is illegal, immoral, or against public policy, the contract is considered void ab initio.

Examples of Unlawful Consideration or Objects include contracts to commit a crime, contracts that promote fraud or deception, or contracts that harm public welfare. It’s crucial to ensure that any consideration or object in a contract is lawful to protect the rights and interests of all parties involved.

RELEVANT SECTIONS :

1. Section 2(d) {Definition of Consideration} : This section defines consideration as “when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the promise.”
2. Section 10 {What Agreements are Contracts} : This section states that all agreements are contracts if they are made by free consent of parties, for a lawful consideration, with lawful objects, and are not expressly declared as void.
3. Section 23 {Consideration or Object Unlawful in Part} : This section specifies that if the object or consideration of a contract is partially lawful and partly unlawful, the agreement is void to the extent of the unlawful portion.
4. Section 24 {Agreements Void, if Consideration or Object is Unlawful} : This section states that any agreement that involves consideration or object that is unlawful is void.
5. Section 26 {Agreements Without Consideration, Void, Unless} : This section stipulates that an agreement made without consideration is generally void, except for certain specified exceptions such as promises made in writing, promises to compensate for past voluntary acts, and promises to pay a time-barred debt.
6. Section 27 {Agreement in Restraint of Trade, Void} : This section declares that any agreement that imposes an unreasonable restraint of trade is void.
7. Section 28 {Agreements in Restraint of Legal Proceedings, Void} : This section states that any agreement that restricts a person’s right to enforce their legal rights through legal proceedings is void.

The sections of the Indian Contract Act provide a legal framework to ensure that contracts are based on Lawful Consideration and have Lawful Objects, while also addressing certain exceptions and prohibitions.These provisions ensure that contracts are entered into with genuine intentions, without violating any legal or ethical boundaries. It helps protect the interests of all parties involved and maintains the overall integrity of contracts.

REFERENCES :

https://indiankanoon.org/docfragment/112527633/?formInput=lawful%20object%20%20doctypes%3A%20judgments – INDIAN KANOON

https://main.sci.gov.in/jonew/judis/6101.pdf – SUPREME COURT OF INDIA