Contract Law · Validity, Discharge and Performance of Contract

Unlawful Consideration and Object

Apply Sections 23 and 24 to unlawful bargains, distinguish object from consideration, and identify the effect on connected transactions.

5 min readReviewed by Advocate Aditya Sharma
Sections 23 and 24Section 30

In one line

An agreement is void when its consideration or object falls within any ground of unlawfulness listed in Section 23.

After this note, you should be able to

  • Apply all five grounds in Section 23.
  • Distinguish an unlawful agreement from one that is merely void.
  • Use severability correctly under Section 24.

The five Section 23 grounds

Consideration is what is exchanged. Object is the purpose the agreement seeks to achieve.

Forbidden by law
The promised act is directly prohibited by law.
Defeats a law
The bargain indirectly circumvents the purpose or operation of a legal rule.
Fraudulent
The agreement is designed to carry out or facilitate fraud.
Injury
The bargain involves or implies injury to the person or property of another.
Immoral or opposed to public policy
Courts apply these grounds cautiously and through recognized legal principles.

Effect and severability

Unlawfulness makes the agreement void, but the effect on related promises depends on structure and statute.

Under Section 24, an inseparable unlawful part can invalidate the agreement. A genuinely independent lawful promise may survive where it can be separated without rewriting the bargain.

Do not equate every void agreement with illegality. A wager is generally void under Section 30, but Gherulal Parakh shows that void does not automatically mean forbidden by law for every collateral purpose.

Work through the facts

Illustration

Facts

A promises to pay B for obtaining a public licence through bribery and false documents.

Likely result

The consideration and object are forbidden, fraudulent and opposed to public policy. The agreement is void and cannot be enforced.

What to learn

Name the exact Section 23 ground instead of writing only that the bargain is illegal.

Cases with a purpose

Landmark judgments

Learn the rule and where to use it. A case name without its legal function adds very little to an answer.

Gherulal Parakh v. Mahadeodas Maiya

Further reading

AIR 1959 SC 781

Principle: An agreement that is void is not necessarily illegal or forbidden by law, and public policy should be developed cautiously.

Use in an answer: Use it to distinguish void wagers from agreements unlawful under Section 23.

Read primary judgment

Central Inland Water Transport Corporation v. Brojo Nath Ganguly

Further reading

(1986) 3 SCC 156

Principle: A grossly unfair term imposed through severe inequality of bargaining power may be void as opposed to public policy.

Use in an answer: Use it carefully for unconscionable standard terms, not as a general power to rewrite every harsh contract.

For a 10-mark answer

Answer structure

  1. Identify the consideration and object separately.
  2. Apply the precise Section 23 ground.
  3. Explain whether the agreement is void, illegal or merely unenforceable.
  4. Test severability and connected transactions.

Common mistakes

  • Treating every void agreement as illegal.
  • Using public policy without a recognized principle.
  • Severing terms that form one indivisible bargain.

Before you close the tab

Quick revision

  • Section 23 contains five grounds of unlawfulness.
  • Object and consideration are different inquiries.
  • Void does not always mean illegal.
  • Section 24 controls inseparable unlawful parts.

Test yourself

  1. What are the five Section 23 grounds?
  2. Why is every void agreement not illegal?
  3. When can a lawful part survive?

Short answers

Frequently asked questions

Are object and consideration the same?

No. Consideration is the price exchanged for the promise, while object is the purpose the parties seek to achieve.

Is every void agreement illegal?

No. Some agreements are void because the law withholds enforcement without treating their purpose as forbidden. The distinction affects collateral transactions.

Primary sources

This is an educational study note. Always read the bare provision and the full judgment before relying on a proposition in research or practice.