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

Under Section 24 of the Indian Contract Act, 1872, what is the legal effect when any part of a single consideration for one or more objects is unlawful?

The agreement is void. Section 24 provides that where any part of a single consideration for one or more objects, or any part of one of several considerations for a single object, is unlawful, the whole agreement is void. The lawful portion is not saved.

  1. AThe agreement is voidCorrect
  2. BThe agreement is voidable at the option of the innocent party
  3. CThe lawful part is enforceable and the unlawful part is struck out
  4. DThe agreement is valid but unenforceable until the Court approves

Explanation

Section 24 says that if any part of a single consideration for one or more objects, or any part of any one of several considerations for a single object, is unlawful, the agreement is void. The text makes no provision for severing the lawful part, so the option that enforces the lawful part is wrong.

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