Section 24 of Indian Contract Act

24. Agreements void, if considerations and objects unlawful in part.— If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void.

Illustration

A promises to superintend, on behalf of B, a legal manufacture of indigo, and an illegal traffic in other articles. B promises to pay to A a salary of 10,000 rupees a year. The agreement is void, the object of A’s promise, and the consideration for B’s promise, being in part unlawful.

Final Thoughts

Introduction

The Indian Contract Act, 1872 governs contracts and agreements in India. One important principle in contract law is that an agreement cannot be enforced if it involves something illegal. Section 24 specifically deals with situations where only part of the agreement or consideration is unlawful.

Meaning of Key Terms

• Consideration: Consideration means something of value given by one party to another in exchange for a promise. It can be money, services, or anything else agreed upon.
• Object: Object refers to the purpose or goal of the agreement.

Explanation of Section 24

This section says that if any part of the consideration or the object of the contract is illegal or forbidden by law, then the whole agreement becomes void.

• When one consideration covers more than one object, and even a part of it is unlawful, the agreement is void.
• When several considerations exist for one object, and one or part of any consideration is unlawful, the agreement is also void.

In simpler words, even if a small part of the contract involves something illegal, the entire contract cannot be enforced by law.

Illustration and Analysis

A agrees to manage B’s legal indigo manufacturing business and also an illegal trade in other goods. B promises to pay A a salary of ₹10,000 per year.

• Here, the consideration is A’s promise to manage both legal and illegal businesses.
• The object includes both legal manufacture and illegal trade.

Since part of the contract (the illegal trade) is unlawful, the whole agreement is void. Even though the indigo business is legal, the involvement in illegal trade makes the entire contract unenforceable.

Legal Significance

Section 24 protects public interest and the rule of law by ensuring that courts do not enforce agreements with illegal parts. It discourages parties from including unlawful activities in contracts. This principle promotes fairness and justice by stopping people from benefiting from illegal agreements.

Conclusion

Section 24 of the Indian Contract Act clearly states that any agreement with illegal parts in either its consideration or object is void. This means the contract cannot be legally enforced, and parties cannot claim rights or obligations from it. Understanding this section is important for anyone drafting or entering into contracts to ensure all parts are lawful and valid.