Lawful Object

In contract law, a “lawful object” is one of the essential elements required for a valid contract under the Indian Contract Act, 1872. The Act stipulates that a contract must be made for a lawful object and lawful consideration. If either of these is absent or deemed unlawful, the contract becomes void and unenforceable. Understanding the concept of a lawful object is critical for ensuring that contracts are legal, ethical, and enforceable in a court of law.

Definition of Lawful Object

A lawful object refers to the purpose or subject matter of a contract. For a contract to be valid, its object must comply with legal standards and should not be against the law, public policy, or morality. A contract’s object is unlawful if it violates any statutory laws or is prohibited by any regulatory authorities. It must also not be harmful to an individual, society, or go against the larger good of the community.

According to Section 23 of the Indian Contract Act, an object is deemed unlawful if:

1. It is forbidden by law.
2. It is of such a nature that if permitted, it would defeat the provisions of any law.
3. It is fraudulent.
4. It involves or implies injury to the person or property of another.
5. The court regards it as immoral or opposed to public policy.

If a contract involves any of these factors, it is rendered void, and no legal action can be taken to enforce it.

Examples of Unlawful Objects

To understand the concept of a lawful object more clearly, let’s look at some examples of unlawful objects that make contracts void:

1. Contracts Forbidden by Law: Any contract to carry out an illegal activity is considered void. For example, a contract for the sale of prohibited drugs or contraband goods is unlawful because these objects are forbidden by law.
2. Fraudulent Contracts: If the object of the contract involves deceit or fraud, it is unlawful. For instance, a contract to defraud a government agency by presenting fake documents is void.
3. Contracts Defeating the Purpose of Law: A contract whose object is to circumvent a legal obligation is unlawful. For example, if two parties enter into an agreement to avoid paying taxes by hiding their true financial status, the object of the contract is to defeat the law and is thus void.
4. Contracts Causing Harm or Injury: If a contract’s object leads to physical or financial harm to another person, it is deemed unlawful. For example, hiring someone to carry out an act of violence or destruction of property is considered an unlawful object.
5. Immoral Contracts: Courts often declare contracts with immoral objects void. A common example is contracts related to prostitution or human trafficking, which are against societal morals and ethics.
6. Contracts Against Public Policy: Agreements that go against the public good are void. For instance, contracts that restrain trade, limit the freedom to marry, or interfere with the justice system are all against public policy and are therefore unenforceable.

The Role of Public Policy and Morality

Public policy plays a significant role in determining whether an object is lawful. Contracts that violate public policy are generally viewed as those that have a negative impact on society. Courts in India have consistently declared agreements that monopolize trade, create illegal restraints on marriage, or interfere with justice as unlawful. Public policy is a dynamic concept, and what may be acceptable at one point in time could change as societal norms evolve.

In addition to public policy, morality also influences whether a contract is enforceable. Contracts that involve acts considered immoral by the courts are automatically void. For example, an agreement to carry out an act of corruption is considered immoral and, thus, unlawful.

Effect of Unlawful Object on Contracts

When a contract contains an unlawful object, the entire agreement becomes void. Neither party can enforce the contract, and any benefits or obligations arising out of it are not legally recognized. In some cases, where the unlawful portion of a contract can be separated from the lawful part, the contract may still be partially valid. However, the unlawful object will remain unenforceable.