Illegal And Unenforceable Agreement

Question 1

Illegal agreements are void

Answer 1

Sec 23 - illegal and void

Exturpi causa non oritor actio
1. Act prohibited by law
2. Defeats the purpose of law- limitiation law
3. Act which is fraudulent
4. Involves injury to another : pay for printing lible
5. Immoral or against pp

Specifically explaining point 1

1. Nutan kumar vs IInd ADJ Banda - law = art 13 . Statute, ipc ordinance etc
2. JHARIA COAL FIELD VS KALLURAM AGGARWAL - knowingly- sale of electricity - bihar electric control order
3. Bribe

Question 2

All illegal agreement are void but not vice versa

Answer 2

23-30 - void
23,24 - illegal

Part 1 : write 5 elements of illegal agreement

Part 2: all void are not illegal

Nutan kumar case - law may forbid making a contract (illegal) or if made may prevent it from being enforced in court (void)

Rajat kumar rath vs UOI - in case of illegal agreement collateral contracts are also void.

Question 3

Public policy

Answer 3

Sec 2(h), sec 10, sec 23- c& o must not be illegal

1. Ex turpi causa non oritour actio
2. Scope of expression — RATTAN CHAND vs ASKAR NAWAZ - twin touchstones of public good and public mischief , judges not as men of legal learning but enlightened memebers of community
3. Some examples
   - when consideration is an act of sexual immorality- kandaswami vs narayana swami
   - Trading with enemy
   - Stifling prosecution
   - Agreement for sale of public office
   - Agreement to create monopoly
4. Problem as pointed out by Burrough justice in Richardson vs malice - unruly horse - uncertain and fluctuating
5. Sc in central water transport vs BROJONATH GANGULY CASE - long standing precedents, preamble, FR and DPSP
6. Cheshire and fifoot - judge must expound not expand.. Unless clear that incontestable harm to public

Question 4

Wager agreement

Answer 4

Sec 30

Rationale - discourage people from completely relying on luck for their earnings rather than,…..

CHARACTERISTICS

1. promise to pay
2. Happening or not happening
3. Uncertain event
4. No party has control
5. No party has interest

Not prize competition act, game of skill, horse race, deal in shares

Not illegal. So collateral agreement valid. Ex : betting loans

Question 5

Contigent contract

Answer 5

Section 31- To do Or not to do something if an event collateral to the contract happens or not
Uncertain event
Future event is collateral, not main subject

Question 6

Wager vs continent

Answer 6

1. No definition vs sec 31 defines
2. Agreement vs contract ( valid and enforceable)
3. Mutual promise vs one way promise
4. No interest vs propietary interest

5 insured pays premiun

Question 7

Objects forbidden by law makes an agreement void

Answer 7

1. 2(h), 10,23
2. Jaffer Ali vs Budge Budge case - here object means purpose and design
3. Nutan Kumar vs ADJ Banda - law
4. Jharia coal field vs kalluram aggarwal
5. Money borrowed for marraige of minor