Skip to main content

Legal Objects in Contract Law

Introduction​

For an agreement to be enforceable as a contract, its object must be lawful. Under Section 10 of the Indian Contract Act, 1872, an agreement is a contract only if it is made for a lawful consideration and with a lawful object, by free consent of parties competent to contract, and is not expressly declared void. This chapter explains what "object" means, when it is unlawful, and the consequences of unlawfulness.

What "Object" Means​

In contract law the object of an agreement is its purpose or design — what the parties actually intend to achieve. It is distinct from consideration, which is the price or return moving between the parties. An agreement may have perfectly good consideration on each side yet an unlawful object; for example, money paid (valid consideration) for the commission of a crime (unlawful object). Both the consideration and the object must be lawful for the agreement to be valid.

Section 23: When Object and Consideration Are Lawful​

Section 23 of the Indian Contract Act, 1872, is the central provision. It states that the consideration or object of an agreement is lawful unless it falls within one of the following heads. Where it does, the consideration or object is unlawful, and every agreement of which the object or consideration is unlawful is void.

The heads of unlawfulness under Section 23 are:

  1. It is forbidden by law. If the object involves doing something that a statute prohibits — for example, selling goods whose sale is banned, or acting without a licence the law requires — the object is unlawful.

  2. It is of such a nature that, if permitted, it would defeat the provisions of any law. Even if not directly forbidden, an object that indirectly frustrates the purpose of a statute is unlawful. An agreement designed to evade a taxing statute or a regulatory scheme falls here.

  3. It is fraudulent. An agreement whose purpose is to defraud a third party or the public is unlawful.

  4. It involves or implies injury to the person or property of another. An object that contemplates causing physical harm to a person or damage to another's property is unlawful.

  5. The Court regards it as immoral, or opposed to public policy. This is the widest head. Agreements the court considers contrary to accepted standards of morality, or harmful to the interests of society, are void on this ground.

Example​

If A pays B to physically assault C, the object (injury to C's person) is unlawful under head 4, and the agreement is void. Neither A nor B can enforce it.

Illustrative Heads of "Public Policy"​

Indian courts have, over time, recognised several categories of agreements as opposed to public policy and therefore void. These include, among others:

  • Agreements to commit or facilitate a crime or a civil wrong.
  • Agreements that interfere with the course of justice (for example, stifling a prosecution for a non-compoundable offence).
  • Trafficking in public offices — agreements to procure a public position for reward.
  • Maintenance and champerty in their objectionable forms (funding litigation for an improper motive or a share of the proceeds where the arrangement is unfair or against public interest).
  • Agreements that tend to injure public services or promote corruption.

Courts have generally treated public policy as a settled set of recognised heads rather than an open licence to strike down bargains, expanding it only with caution.

  • Section 24 — If any part of a single consideration for one or more objects, or any one or any part of several considerations for a single object, is unlawful, the whole agreement is void. Partial unlawfulness can therefore taint the entire contract.

  • Sections 26 to 30 separately declare certain specific agreements void, and are often studied alongside Section 23 because they too restrict what objects the law will enforce. These include agreements in restraint of marriage, agreements in restraint of trade, agreements in restraint of legal proceedings, uncertain agreements, and wagering agreements.

Consequences of an Unlawful Object​

Where the object is unlawful under Section 23, the agreement is void from the outset (void ab initio). This means:

  • Neither party can sue to enforce it.
  • As a general rule, the law will not assist a party to recover what has been transferred under an illegal agreement, on the principle that no action arises from a base cause (though limited statutory exceptions to recovery exist).

Distinguishing "Void" from "Illegal"​

Every agreement with an unlawful object is void, but not every void agreement is illegal. An illegal agreement is one whose object is itself forbidden by law or is criminal in nature; it can also taint collateral transactions connected to it. A merely void agreement (for example, one that is simply uncertain) is unenforceable but does not carry the same taint of illegality. This distinction matters when deciding whether related or collateral agreements survive.

Summary​

  • The object is the purpose of an agreement; it must be lawful for the agreement to be a contract (Section 10).
  • Section 23 lists the heads on which an object or consideration is unlawful: forbidden by law; defeating the provisions of any law; fraudulent; involving injury to person or property; or immoral or opposed to public policy.
  • An unlawful object makes the agreement void, and under Section 24 partial unlawfulness can void the whole agreement.
  • "Void" and "illegal" overlap but are not identical; illegality can also affect collateral transactions.

Additional Resources​

For further reading on the lawful-object requirement in contract law, consider exploring:

  • The Indian Contract Act, 1872
  • Standard commentaries on the Indian Contract Act, 1872 (for the case law developing the heads of public policy under Section 23).