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A and B agree to deal in smuggled goods and share the profits equally. After the goods are sold, A keeps all the profits. Can B sue A for his share?

Question and options

A and B agree to deal in smuggled goods and share the profits equally. After the goods are sold, A keeps all the profits. Can B sue A for his share?

  1. No, because an unregistered firm cannot sue its partners

  2. Yes, because the venture is over and the profits are realised

  3. Yes, because the promise to share profits is severable

  4. No, because the agreement is void for an unlawful object

Answer and explanation

Correct answer: D - No, because the agreement is void for an unlawful object

Section 23 of the Indian Contract Act, 1872 makes an agreement void when its object is forbidden by law, and the courts will not enforce a claim to share the profits of smuggling. The bar does not depend on registration under the Partnership Act, and the profit-sharing promise is part of the unlawful bargain, not a separate lawful one.

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