The Indian Contract Act, 1872, identifies certain agreements that are deemed illegal and unenforceable. The Act states that any agreement that is opposed to public policy, immoral, fraudulent, or involving criminal activity is not valid. In this article, we will discuss what makes an agreement illegal under the Indian Contract Act.

Agreements Opposed to Public Policy

The Indian Contract Act defines agreements opposed to public policy as those that have a negative impact on society at large. This could include contracts that violate laws or regulations, or those that go against public morals. For example, a contract to sell or distribute drugs, which is against the law, would be considered illegal. Similarly, agreements that seek to promote discrimination, such as those that bar certain classes of individuals from access to services, would also be considered opposed to public policy.

Agreements that are Immoral

Agreements that are immoral are those that go against commonly held ethical or moral standards of society. For example, an agreement between two individuals to commit adultery would be considered immoral and therefore illegal. Other examples of immoral agreements include those that involve prostitution, human trafficking, or the sale of human organs.

Agreements that are Fraudulent

An agreement entered into through deceit or misrepresentation is considered fraudulent and therefore illegal. The Indian Contract Act specifies that any agreement that is based on fraud or misrepresentation is void and unenforceable. For instance, a contract between two parties where one party intentionally conceals information or provides false information to the other party would be considered fraudulent.

Agreements Involving Criminal Activities

Agreements involving illegal activities such as theft, extortion, or bribery are not considered valid under the Indian Contract Act. For example, a contract between two individuals to commit a robbery would be illegal and unenforceable. Similarly, agreements related to gambling or betting, which are illegal in some states in India, are not considered valid.

Conclusion

In summary, the Indian Contract Act identifies certain agreements that are deemed illegal and unenforceable. These include those that are opposed to public policy, immoral, fraudulent, or involving criminal activity. It is important for individuals to understand the legal implications of such agreements before entering into them. Any agreement that is deemed illegal does not hold any legal standing in the court of law. Therefore, it is always advisable to seek legal counsel before entering into any agreements.