ILLEGAL AGREEMENTS

This rough draft is submitted in the partial fulfilment of project in Law of Contracts.

Submitted to: Submitted by:

Ms Sushmita Singh Aarya Gurjar,(2801)
B.B.A.,LL.B (Hons.)

February,2023
Chanakya National Law University, Patna

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 INTRODUCTION
Illegal agreement can be defined as an agreement between parties which is not recognised as
legal by the courts because they have an illegal end. Illegal agreement is the type of the
agreement which cannot be treated by the official jurisdiction as the regular one. In simple
words, an agreement between two or more parties which results in violation of law is termed
as an illegal agreement. A contract is illegal if it involves doing something that is a criminal
act or a civil wrong, or against the public good. While making any agreement it is necessary
to ensure that the agreement is as per the law. It is only the legal agreements which give rise
to any kind of legal right. An agreement the object of which is opposed to the law of the land
may be either unlawful or simply void, depending upon the provision of the law to which it is
opposed.1 A classic example of an illegal agreement is an agreement for a theft.

Section 23 of the Indian Contract Act, 1872 renders certain considerations and agreements as
unlawful or illegal. An agreement hit by Section 23 is void ab initio and thereby in no
circumstances enforceable. It states what consideration and objects are lawful, and what not.
The consideration or object of an agreement is lawful, unless it is forbidden by law;  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.2

1
Avtar Singh, Contract and Specific Relief, Lucknow: Eastern Book Company,2022,253
2
See, available at < https://indiankanoon.org/doc/1625889/> last accessed on January 31, 2023

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LITERATURE REVIEW

In the book “Contract and Specific Relief”, Avtar Singh brilliantly explain about the several
provisions regarding unlawful agreements along with illustrations.

RESEARCH OBJECTIVES

To understand the provisions given in Indian Contract Act regarding illegal agreements.

RESEARCH QUESTIONS

1. When an agreement becomes illegal?

2. How is void agreement different from illegal agreement?

HYPOTHESIS

One of the factors that make an agreement void is the illegality of the contract, such as
contract whose object or consideration is unlawful.

SCOPE AND LIMITATIONS OF THE STUDY

The scope of research is to study the about various laws related to illegal agreements in
contract. The limitation of the research is that the researcher will be relying on case laws
from 2 or 3 other countries other than India for the study.

RESEARCH METHODOLOGY

The researcher will be relying on Doctrinal method of research to complete the project. The
doctrinal method helps in doing a comparative study of the topic. These include various
primary and secondary sources of literature and insights.

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MODE OF CITATION

The mode of citation used is Bluebook 20th Edition.

TENTATIVE CHAPTERISATION

 Introduction
 Features of Illegal Agreement
 Illegal Agreement as an interference of personal liberty
 Illegal Agreement Vs Void Agreement
 Case Laws
 Effect of Illegal Agreements
 Conclusion
 Suggestions
 Bibliography