One of the most important elements of a valid contract is that the parties must enter into a contract for a legitimate good. An agreement whose purpose is contrary to the law of the country may be either illegal or simply non-aeig, depending on the provisions of the law against which it opposes. [1] Section 23 of the Indian Contract Act, 1872 makes certain considerations and objects considered illegal. “The consideration or purpose of an agreement is lawful, unless it is prohibited by law; or is of such that, if allowed, the provisions of a law would not fall; fraud; or involves the violation of someone else`s person; or the Court considers it immoral or contrary to public policy. The general rule is that the facts of illegality must be invoked and, if one of the parties challenges an agreement as unenforceable. B, for example as contrary to public policy, it is for him to expose and prove the particular circumstances that invalidate the contract. [8] This part of the Contracts Act speaks of an inconclusive agreement, but it must be remembered that there is a very small distinction between illegal and non-contractual contracts. Although the purpose or idea of an agreement, sometimes not directly prohibited by law, they are always prohibited when it comes to the nature of destroying the purpose of the provision of the law. The authorization of such an object or such consideration is void. If a decree-law provides for a sanction for an act or promise, the execution of such an act or promise would amount to the defeat of that law, because it is implied that the statute intends to prohibit that act. The ordinary task of the courts is to rely on well-established public policy chiefs and apply them to different situations.
For example, A, the CEO of a company, agrees to award a contract to B if the latter pays rs 5,000 to the former. The agreement tends to create an interest against bonds and is non-hazard because of the trade in public functions. The California Court of Appeals for the Third District refused to execute an agreement on the payment of debt notes used to acquire the organization of the drugs and similar products. Although the items sold were not in fact illegal, the court refused to comply with the agreement on public policy grounds. Example 2: A agrees to leave his daughter as concubine to B. The agreement is subject to nullity because it is immoral, although the rental cannot be punishable under the Indian Penal Code (45 of 1860). An agreement whose purpose is to deceive others is null and void. Where the parties agree to defraud a third party and not a contracting party, their agreement is illegal and not bitter. The first two examples of field 6.1 fall into this category.
A construction leave obtained other than on the charge of illegality of the purpose of the contract was found to be non-illegal if the construction does not find a buyer in contentious circumstances, but the contractor cannot dispose of it according to the doctrine of illegality or impossibility. [19] If the purpose or consideration of an agreement is unethical, it is set aside. The following examples would help to better understand the point. If the purpose or consideration of an agreement is the execution of an act prohibited by law, the agreement is annulled. Acts or undertakings prohibited by law are punishable by law, as are those prohibited (explicitly or implicitly) by specific legislation of Parliament and state legislators. For example, the production or sale of excised goods is prohibited by the excise law, except with a state license. The sale of unlicensed spirits is therefore prohibited by the Excise Act and is therefore illegal.