Jurisprudence, Interpretation and General Laws · Contract Law

Legality of Object and Void Agreements under the Indian Contract Act

Updated 11 October 2026 · Fact-checked

An agreement is a contract only if its consideration and object are lawful and it is not expressly declared void (Section 10). Section 23 lists unlawful objects. Sections 24 to 30 and 36 declare other agreements void, such as those in restraint of marriage, trade or legal proceedings, wagers and uncertain agreements. Answer by naming the section, applying the facts, then concluding.

Understand Legality of Object and Void Agreements

Section 10 says an agreement becomes a contract when it is made by free consent of competent parties, for a lawful consideration and with a lawful object, and is not expressly declared void. This topic deals with the last two conditions and the list of void agreements.

Section 23 says the consideration or object is lawful unless it is: forbidden by law; of such a nature that, if permitted, it would defeat the provisions of any law; fraudulent; involving or implying injury to the person or property of another; or regarded by the Court as immoral or opposed to public policy. If any of these applies, the consideration or object is unlawful, and the agreement is void.

Section 24 deals with partial illegality. If any part of a single consideration for one or more objects, or any one part of several considerations for a single object, is unlawful, the whole agreement is void.

Section 57 deals separately with reciprocal promises that fall in two sets. Where the first set is legal and the second set, to be done under specified circumstances, is illegal, the first set is a contract and the second is a void agreement. It covers a different situation from Section 24, so do not treat it as an exception to Section 24.

Other sections declare particular agreements void. Section 26: agreements in restraint of the marriage of any person, other than a minor. Section 27: agreements in restraint of trade, to that extent. Section 28: agreements in restraint of legal proceedings, to the extent stated. Section 29: agreements whose meaning is not certain or capable of being made certain. Section 30: wagering agreements. Section 36: contingent agreements dependent on an impossible event. Section 56 makes an agreement to do an act impossible in itself void.

Keep the difference between void and unlawful clear. Every unlawful-object agreement is void, but a void agreement need not be unlawful. A restraint of trade agreement is void, yet it is not a crime.

Key rules to remember

Valid contract (Section 10): Free consent + competent parties + lawful consideration + lawful object + not expressly declared void; Section 10 also saves laws requiring writing, witnesses or registration.
Unlawful object or consideration (Section 23): Forbidden by law | defeats law | fraudulent | injury to person or property | immoral or opposed to public policy; Any one ground makes the agreement void.
Partial illegality (Section 24): Any part of a single consideration for one or more objects, or any part of several considerations for a single object, unlawful ⇒ whole agreement void; Section 57 is a separate provision. It covers reciprocal promises in two sets, the first legal and the second illegal: the first set is a contract and the second is a void agreement.
Restraint of marriage (Section 26): Agreement in restraint of marriage of any person other than a minor ⇒ void; The Section protects the marriage of adults; the text excludes minors.
Restraint of trade (Section 27): Restraint on lawful profession, trade or business ⇒ void to that extent; Exception 1: seller of goodwill may agree not to carry on a similar business within specified local limits, so long as the buyer carries on a like business there, if the limits seem reasonable to the Court.
Restraint of legal proceedings (Section 28): Absolute restriction on enforcing rights by usual legal proceedings, or limiting the time for it ⇒ void to that extent; Saved: a contract to refer future disputes to arbitration, on the condition that only the amount awarded is recoverable (Exception 1); written agreements to refer to arbitration questions that have already arisen (Exception 2); and bank or financial institution guarantee terms with a period of not less than one year (Exception 3).
Uncertainty (Section 29): Meaning not certain, or not capable of being made certain ⇒ void; Test: can the meaning be fixed from the words, trade usage or a stated method?
Wager (Section 30): Wagering agreement ⇒ void; no suit to recover winnings or money entrusted to abide the result; Exception: horse-race prize of ₹500 or upwards.
Impossibility (Sections 36 and 56): Agreement to do an impossible act, or contingent on an impossible event ⇒ void; Section 56 also covers later impossibility and compensation where the promisor knew, or could have known, of the impossibility.

How to solve Legality of Object and Void Agreements questions

Use this method for any problem or theory question on legality of object and void agreements.

1Identify the agreement, the parties, the consideration and the object. Write them in one line.
2Start from Section 10: say that a contract needs lawful consideration and object and must not be expressly declared void.
3Test Section 23 grounds one by one against the facts and pick the one that fits.
4If the facts show a restraint, a wager, vagueness or impossibility, name the specific section (26, 27, 28, 29, 30, 36 or 56).
5Check the exceptions in that section, for example goodwill in Section 27 or arbitration in Section 28.
6Check for partial illegality. Apply Section 24, and Section 57 if the promises fall in a legal set and an illegal set.
7Conclude clearly: void, void to that extent, or valid. State the effect on the parties.

Quickest way: Section-matching shortcut

When to use it: Use when time is short and the question is a short case problem.

Spot the trigger word in the facts: marriage, not to compete, no court, bet, vague terms, impossible, illegal part.
Match it to the section: 26, 27, 28, 30, 29, 36 or 56, 23 or 24.
Check the one exception that usually appears in that section.
Write: rule, one-line application, conclusion.

Common mistakes in Legality of Object and Void Agreements

Saying every restraint of trade is valid if it is reasonable.
Students carry English law ideas of reasonableness into Section 27.
Fix: The text of Section 27 declares such agreements void to that extent. The only saving in the text is Exception 1 on sale of goodwill, with reasonable local limits.
Treating void and unlawful as the same.
Both lead to a void agreement.
Fix: Unlawful object means a Section 23 ground. Void agreements include harmless ones like uncertain agreements. Say which category applies.
Stating that a wagering agreement is illegal and punishable under the Contract Act.
The word wager sounds criminal.
Fix: Section 30 declares it void and bars a suit to recover winnings. Do not say the Contract Act punishes it.
Applying Section 26 to the marriage of a minor.
Students remember only 'restraint of marriage'.
Fix: The Section covers the marriage of any person other than a minor. Read that carve-out in the text.
Ignoring Section 24 and Section 57 when only part of the deal is illegal.
Students decide on the whole agreement at once.
Fix: Check whether the unlawful part is in a single consideration (Section 24, whole void) or a separate reciprocal set (Section 57, legal set survives).
Saying Section 28 makes arbitration clauses void.
The Section speaks of restraint of legal proceedings.
Fix: Exception 1 saves a contract to refer future disputes to arbitration, on the condition that only the amount awarded is recoverable. Exception 2 saves written agreements to refer questions that have already arisen. Cite the exception and its condition.

Worked examples

Example 1

Ravi sells his sweet shop and its goodwill in Pune to Meena for ₹12,00,000. He agrees not to run a similar shop anywhere in India for his lifetime. Meena later sues when Ravi opens a sweet shop in Pune. Advise.

Show the solution

Provision: Section 27 declares an agreement restraining a lawful trade void to that extent. Exception 1 lets a seller of goodwill agree not to carry on a similar business within specified local limits, so long as the buyer carries on a like business there, provided the limits appear to the Court reasonable, regard being had to the nature of the business.
Facts: Ravi sold goodwill, so Exception 1 is available in principle. But the limit he specified in the agreement is all of India, not Pune.
Analysis: The Court looks at the nature of the business. A single sweet shop in Pune does not need protection across India. The all-India limit is unlikely to appear reasonable, so it is unlikely to satisfy Exception 1.
Application: Exception 1 protects only limits that the parties specified and that appear reasonable. The text of Section 27 does not say that the Court can cut down an excessive restraint to Pune, which the parties did not specify. So you cannot state as settled that a Pune-only restraint will be upheld.
Conclusion: Meena's claim rests on a restraint that is unlikely to fall within Exception 1. Otherwise Section 27 applies and the restraint is void to that extent.

Answer: Exception 1 to Section 27 saves the restraint only if the specified local limits appear reasonable to the Court. The all-India limit is unlikely to meet that test, so the restraint is unlikely to be enforceable and is void to that extent under Section 27. The text of Section 27 does not provide for rewriting the limits to Pune, so Meena cannot assume that a Pune-only restraint will be upheld.

Example 2

Asha agrees to supervise a lawful textile unit for Bhavin and also to run an illegal trade in banned goods. Bhavin promises ₹10,000 a month. Is the agreement enforceable?

Show the solution

Provision: Section 23 makes an object unlawful if forbidden by law, and an agreement with an unlawful object is void. Section 24 says that if any part of a single consideration for one or more objects is unlawful, the agreement is void.
Facts: Asha's single promise covers two objects, one legal and one illegal. Bhavin's single payment is the consideration for both.
Analysis: The payment is one consideration for several objects, and part of those objects is unlawful. The agreement is not split into separate reciprocal sets, so Section 57 does not save the lawful part.
Conclusion: Section 24 applies to the whole agreement.

Answer: The agreement is void under Section 24 read with Section 23, and neither party can enforce it. It is similar to the Section 24 illustration, where a legal manufacture of indigo is combined with an illegal traffic in other articles for a salary of ₹10,000 a year. The facts here differ, but the reasoning is the same.

Exam tips

Always cite the section number with the rule. ICSI answers earn marks for provision, facts and conclusion in that order.
Learn the exceptions of Sections 27, 28 and 30. Examiners often build the problem around an exception.
For theory questions, list void agreements under Sections 23 to 30, 36 and 56 with one line each.
For wagering questions, state the Section 30 rule and the horse-race prize exception of ₹500 or upwards. If you compare a wager with a contingent contract, say that a wager is void under Section 30.
Close every problem with a clear line: void, void to that extent, or valid.

Practice questions from Contract Law

Legality of Object and Void Agreements in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Legality of Object and Void Agreements: frequently asked questions

Which agreements are void under the Indian Contract Act?

The Act declares void agreements with unlawful object or consideration (Section 23), partly unlawful ones (Section 24), restraint of marriage (Section 26), restraint of trade (Section 27), restraint of legal proceedings (Section 28), uncertain agreements (Section 29), wagers (Section 30), impossible acts (Section 56) and contingent agreements on impossible events (Section 36).

Is a non-compete clause valid under Section 27?

Section 27 makes any agreement restraining a lawful profession, trade or business void to that extent. The text gives one saving: Exception 1 for a seller of goodwill, with reasonable local limits. Apart from this, you should say the restraint is void to that extent.

What is the difference between an unlawful agreement and a void agreement?

An unlawful agreement has an object or consideration caught by Section 23, and it is void. A void agreement is any agreement with no legal effect, and it may be harmless, like one void for uncertainty under Section 29. So every unlawful agreement is void, but not every void agreement is unlawful.

Can I recover money won on a wager?

No. Section 30 declares wagering agreements void and says no suit shall be brought to recover anything alleged to be won on a wager. The same bar applies to money entrusted to a person to abide the result of a wager.