Indian Contract Act Section 23 — What considerations and objects are lawful, and what not

Summary

The consideration or object of an agreement is lawful unless it falls into one of the listed categories. These categories are: the consideration or object is forbidden by law; or it is of such a nature that, if permitted, it would defeat the provisions of any law; or it is fraudulent; or it involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.

Official Text

The consideration or object of an agreement is lawful, unless— it is forbidden by law4; or is of such a nature that if permitted, it would defeat the provisions of any law; or is fraudulent ; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. Illustrations principal.

Referred to by

• Transfer of Property Act §6 — What may be transferred

Related Judgments

• UNION OF INDIA vs COL. L.S.N. MURTHY & ANR — Supreme Court of India (2011)
• PASL WIND SOLUTIONS PRIVATE LIMITED vs GE POWER CONVERSION INDIA PRIVATE LIMITED — Supreme Court of India (2021)
• CANBANK FINANCIAL SERVICES LTD. vs THE CUSTODIAN AND ORS — Supreme Court of India (2004)
• A.B.C. LAMINART PVT. LTD. & ANR. vs A.P. AGENCIES, SALEM — Supreme Court of India (1989)