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

Vikram, who has instituted a prosecution against Imran for robbery, promises to drop it if Imran restores the value of the stolen goods, and Imran agrees. Under Section 23 of the Indian Contract Act, 1872, this agreement is:

The agreement is void because its object is unlawful. Section 23, illustration (h), gives this very situation: dropping a robbery prosecution in return for restoring the stolen value. Mutual promises and Imran's benefit do not make an agreement with an unlawful object valid.

  1. AValid, because Imran receives a benefit and Vikram receives the money
  2. BVoidable at the option of Imran
  3. CValid if the court approves the compromise later
  4. DVoid, because its object is unlawfulCorrect

Explanation

Section 23, illustration (h), states that an agreement to drop a prosecution for robbery in return for restoring the stolen value is void because its object is unlawful. It is not voidable, and the Act does not make it valid by a later approval. The mutual promises do not cure the unlawful object.

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