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

Under Section 23 of the Indian Contract Act, 1872, an agreement whose consideration or object is unlawful is:

An agreement with an unlawful object or consideration is void under Section 23. It cannot be enforced by either party, and it is not merely voidable. Even if the parties gave free consent, the unlawfulness of the object or consideration makes the agreement void.

  1. AValid but enforceable only in part
  2. BVoidable at the option of either party
  3. CVoidCorrect
  4. DValid if both parties had free consent

Explanation

Section 23 says every agreement of which the object or consideration is unlawful is void. It is not merely voidable, because no party can choose to enforce it. Free consent does not cure an unlawful object.

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