Skip to content

CA Foundation · Business Laws · The Indian Contract Act, 1872

Vikram, a trader in Surat, agrees to pay Rs 2,00,000 to Naresh, a government clerk, if Naresh gets a municipal contract sanctioned in Vikram's favour by misusing his official position. The contract is sanctioned, but Vikram refuses to pay. Can Naresh recover the amount?

Naresh cannot recover the money. The agreement's object is to misuse an official position, which is opposed to public policy and therefore unlawful. An agreement with an unlawful object is void and unenforceable, even if Naresh has already performed his part.

  1. AYes, because the contract was sanctioned and Naresh performed his part
  2. BYes, but only if Vikram received a benefit worth more than Rs 2,00,000
  3. CNo, because the agreement has an unlawful object and is voidCorrect
  4. DNo, because the agreement was not in writing

Explanation

An agreement whose object is to misuse a public official position is opposed to public policy, so its consideration and object are unlawful and the agreement is void. Performance by Naresh does not cure the illegality. The writing option is wrong because the agreement fails on legality, not form, and a written agreement would be equally void.

Did you get it right without looking?

One question tells you little. A timed set on The Indian Contract Act, 1872 shows your real accuracy, how long you take and where you lose marks.

Practise The Indian Contract Act, 1872Free diagnostic mock

More The Indian Contract Act, 1872 questions