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Under Sections 23 and 24 of the Indian Contract Act, 1872, what is the legal effect of an unlawful…

Under Section 23 of the Indian Contract Act, 1872, 'Every agreement of which the object or consideration is unlawful is void.' Similarly, Section 24 provides that if any…

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Under Sections 23 and 24 of the Indian Contract Act, 1872, what is the legal effect of an unlawful object or consideration on the agreement?

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Correct answer A

Under Section 23 of the Indian Contract Act, 1872, 'Every agreement of which the object or consideration is unlawful is void.' Similarly, Section 24 provides that 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. Under Section 2(g), an agreement not enforceable by law is said to be void.

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Option A

Correct. Under Section 23 ('Every agreement of which the object or consideration is unlawful is void') and Section 24 read with Section 2(g) of the Indian Contract Act, 1872, illegality of object or consideration renders the agreement void ab initio.

Option B

Incorrect. Under Sections 19 and 19A of the Indian Contract Act, 1872, agreements induced by coercion, undue influence, fraud, or misrepresentation are voidable, whereas agreements with an unlawful object or consideration are void under Section 23.

Option C

Incorrect. An agreement whose object or consideration is unlawful under Section 23 is void ab initio under Section 2(g), not valid until set aside.

Option D

Incorrect. While some illegal acts are punishable under penal statutes, under the Indian Contract Act, 1872 an unlawful object or consideration (such as one defeating the provisions of a civil statute or opposed to public policy) renders the agreement void under Section 23, not necessarily a criminal offence.

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