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CMA Foundation · Fundamentals of Business Laws and Business Communication · Consideration and Legality of Object

Asha promises to pay Vikram ₹50,000 in return for two things, namely, delivering her goods to Kochi, which is lawful, and bribing a government clerk to clear them unlawfully. Which statement is correct under Section 24?

The agreement is void. Under Section 24, if any one of several considerations for a single object is unlawful, the whole agreement is void. The bribe is unlawful, so the lawful delivery does not validate the agreement, and the Act does not limit voidness to the bribe alone.

  1. AThe agreement is void because one of the several considerations for her promise is unlawfulCorrect
  2. BThe agreement is void only to the extent of the bribe
  3. CThe agreement is valid because the delivery is a lawful consideration
  4. DThe agreement is valid if Vikram did not know the bribe was illegal

Explanation

Section 24 covers the case where any one of several considerations for a single object is unlawful. Here the bribe is an unlawful part, so the whole agreement is void. The option that treats it as void only as to the bribe is wrong because the Act voids the agreement itself.

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