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

In the Section 24 illustration, A promises to superintend a legal manufacture of indigo and an illegal traffic in other articles, and B promises A a salary of 10,000 rupees a year. Why is the agreement void?

The agreement is void because the object of A's promise and the consideration for B's promise are partly unlawful. Although the indigo manufacture is legal, the illegal traffic in other articles taints the single arrangement, so Section 24 makes the whole agreement void.

  1. ABecause the salary is too high for the work
  2. BBecause the object of A's promise and the consideration for B's promise are partly unlawfulCorrect
  3. CBecause A did not specify the kind of indigo
  4. DBecause B's promise is conditional on the profits

Explanation

The illustration says the agreement is void because the object of A's promise, and the consideration for B's promise, is in part unlawful. Adequacy of the salary is irrelevant to validity. Nothing in the illustration involves uncertainty about the indigo or any conditional promise.

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