Legality of an Object

The Indian Contract Act, 1872 ("Act"), Section 23, lists three topics, such as the consideration for the agreement, the agreement's purpose, and the agreement's core provisions. In relation to entering into agreements, Section 23 restricts an individual's freedom and subjects their rights to the other requirements outlined in the section as well as the overriding considerations of public policy. Moreover, Section 264 reveals its relevance to Section 23.

The term "object" as used in Section 23 suggests and denotes "purpose" rather than importance in the same sense as "consideration" and therefore does not imply importance. As a result, even if an agreement's consideration is true and legal, if the goal (object) of the agreement is illegal, the agreement will still be illegal. Since Section 23 is not motivated by thinking or motivation, it restricts the courts to the essential purpose of the exchange or transaction and not to the factors that contributed to it.

What is a Lawful Object?

According to the rules of contract law, the consideration and the object of a contract are both regarded as legal unless −

Forbidden by the Law

A contract is void if it contains an illegal object, a forbidden consideration, or both. Legally sanctioned illegal acts are those that are considered to be unlawful consideration of the object. While establishing the legality of an act, the relevant authority's laws and regulations are also considered. These laws and norms are not applicable, though, if they conflict with the law. A clause that is prohibited by law renders a contract void, although not all void contracts must be unlawful.

Fraudulent in Nature

Contracts that have deceptive terms for their object or consideration are null and invalid.

Defeats the Purpose of the Law

The agreement will be ruled invalid if it was made with the intent to violate any legal requirements. The following conditions must be met for a contract to be void −

• The purpose of the contract is to execute an illegal act.

• The object of the contract is expressly or implicitly banned by law;

• The fulfilment of the contract is impossible without violating the laws.

Involves injury or harm to another person or property

There cannot be any property damage or harm to third parties as a result of the contract's purpose.

Immoral as Per Law

The contract shall not be regarded as void if its purpose and/or consideration are judged immoral. Immoral acts go against the reasonable and proper standards of social behaviour or individual conduct.

Against the Public Policy

In corporate law, a legitimate object is one that shouldn't violate public policy. Public policy serves to uphold and defend the community's overall welfare, not restrict any individual's rights. The following types of contracts are seen as being against public policy −

• Any deal made with a party whose country India does not have friendly relations with renders the agreement void.

• Restraining from prosecution: Any agreement that forbids a party from seeking legal redress is void.

• Maintenance and Champerty: Under a maintenance contract, a party pledges to support a legal action in which he has no personal stake. Champerty is when one party promises to support another in court in exchange for a cut of the awarded damages or settlement.

• A consent to use public offices as commodities

• Contracts to establish monopolies.

• A consent to broker a union as payment.

• A deal to influence governmental or judicial personnel to act corruptly or obstruct legal processes.

Trading with the Enemy

An agreement made during the conflict with an unidentified adversary without the Indian government's approval is illegitimate since it goes against civil policy. A commercial embargo and a ban on interactions with enemy citizens result from the declaration of war. The hostile world's damaging trade is inherent in war itself.

Conclusion

It is impossible to overstate how crucial object validity is to the success of a deal. The agreement is null and void if both the object and the consideration are unlawful. We acknowledge that our efforts to pursue our rights under this Agreement in a court of law will be futile until further notice unless our agreement is subject to the requirements of Sections 10, 23, and 24 of the Indian Contract Act, 1872. This is since a covenant like that would not be considered sacrosanct by the law. To avoid being left without legal recourse in the event of a collision, we must take care when entering into agreements to make sure they are not just "agreements," but rather comply with the law.

Frequently Asked Questions

Q1. What is the legal object of a contract?

Ans. The action that the party receiving the compensation has promised to take or refrain from taking is the purpose of a contract. When a contract is made, its purpose must be legal, and by the time it is carried out, it must be feasible and determinable.

Q2. What is a lawful object example?

Ans. According to this concept, a contract to buy or sell a stolen vehicle, for instance, is illegal from the beginning because doing so is against the law.

Q3. What objects are unlawful?

Ans. The Contract's Purpose Violates Legal Provisions: A contract's purpose is considered unlawful if the act that constitutes it seeks to violate legal provisions or the purposes of the law.

Some of the unlawful objects are −

• Illegal drugs and other such substances

• Arms and weapons

• Stolen property

• Counterfeit money or documents

• Obscene materials or child pornography

• Certain types of wildlife, such as endangered, etc.

Q4. What is the difference between the law and legality?

Ans. Legality refers to what fits within the law and is compliant with a legal framework. It limits us and determines what we can and cannot do according to the law.