What is legality of object ?

Another essential element of a contract that is legality of object and consideration 

The object of consideration of an agreement must be lawful, in order to make the agreement a valid
contract, for, Section 10 lays down that all agreements” are contracts if made for lawful consideration and
with a lawful object. Section 23 declares what kinds of considerations and objects are not lawful. If the
object or consideration is unlawful for one or the other of the reasons mentioned in Section 23, the
agreement is ‘illegal’ and therefore void (Sec. 23). 

The use of the word ‘illegal’ is somewhat a misnomer here. It usually connotes a punishable offence, but
the parties to a so called “illegal agreement,” unless it is expressly punishable by law or amounts to a
criminal conspiracy are not liable to punishment. They have committed no offence. They have merely
concluded a transaction that will be spurned by the courts.’ 

The words ‘object’ and ‘consideration’ used in Section 23 are not synonymous. The word ‘object’ here
means ‘purpose or design.’ Thus, where a person, while in insolvent circumstances, transferred his
property to one of his creditors with the object of defrauding his other creditors, it was held that the
agreement was void and the transfer was inoperative (Jajlar Meher Ali vs Budge Budge Jute Mills Co. ). 
 
The court observed that although the consideration of the contract was lawful but the object was unlawful
because the purpose of the parties was to defeat the provisions of the Insolvency Law. 

Legality of Object

Section 23 of the Indian Contract Act has specified certain considerations and objects as unlawful. The consideration or
objects of an agreement is lawful, unless- it is forbidden by law; is of such a nature that, if permitted, it would defeat the
provision of any law; or is fraudulent; or involves injury to the person or property of another; or the court regards it as
immoral or opposed to public policy.
In each of the above mentioned cases the consideration or object of an agreement is deemed to be unlawful. Every
agreement in which the object or consideration is unlawful is void.

Some examples 

X promises to obtain for Y an employment in the public service, and Y promises to pay X Rs. 1000 for that. This agreement
is void as the consideration in this case is unlawful.

X agrees to let her daughter to hire to Y as a concubine. This agreement is void as it is immoral and as a result opposed to
law.

The following agreements are considered to be against public policy:

 Trade with the enemy:

  An agreement between the citizens of two countries at war with each other is void and hence inoperative.
 Agreement in interference with the course of justice:
 All agreements which interfere with the normal course of law and justice are deemed to be opposed to public policy
and hence are void.
 Agreements which injure the public services are considered to be void.
 Agreements infringing personal freedom
 Agreements hindering parental duties.
 Agreements hindering marital duties

DEFINITION

Literally

The word ‘Legality’ means ‘the state of being legal’   ‘Object’ means ‘purpose’   and ‘Consideration’ means
‘reason’.  
So the meaning of legality of object and consideration is the state of being any reason or purpose legal. 

Traditionally

1.    An agreement will not be enforced by the court if its object or the consideration is unlawful. By the
expression “Object of an Agreement” is meant its purpose on design. The object and the consideration must
both be lawful, otherwise the agreement is void.     

2.    The object or consideration of an agreement must be lawful. In order to make the agreement, a valid
contract, for, Section 10 lays down that all agreements are contracts if made for lawful consideration and
with a lawful object. Section 23 declares what kinds of consideration and objects are not lawful. If the object
or consideration is unlawful for one or the other of the reasons mentioned in Section 23, the agreement is
illegal and therefore void (Section 23).  

UNLAWFUL CONSIDERATION AND OBJECT

1.    If it is forbidden by law-

If the consideration or the object of a contract were forbidden by law, it would be unlawful and hence
unenforceable.

Example-

a)    A promises to pay B Rs.1000 at the end of six months, if C, who owes that sum of B, fails to pay it. B
promises to grant time to C accordingly. Here the promise of each party is a consideration for the promise of
the other party, and they are lawful considerations.

b)    Promises for a certain sum paid to him by B, to make good to be the value of his ship wrecked on a
certain voyage. Here A’s promise is the consideration for B’s payment and B’s payment is consideration for
A’s promise. These are lawful consideration.

Case-
a)    An agreement to sublet a license to sell grass issued under the Madras Abkari Act 1886 would not be
enforceable, because the object of the Act is the protection of the public as well as the revenue. Thithi
Pkurudsu vs Bheemudu, (1902) 26 Mad. 930. 

b)    Where a license to cut grass was given by the Forest Dept. and one of the terms of the license was that
the licensee should not assign his interest on the license without the permission of the Forest Officer, and a
fine was prescribed for a breach of this condition, it was held that there being nothing in the Forest Act to
make it obligatory upon the parties to observe the conditions of the license the assignment would be binding
upon the parties, though it was competent to the Forest Officer to revoke the license if he thought fit to do
so. It was so held because the Act did not forbid the transaction but merely imposed a condition for
administrative purpose. Nazarali v. Baba Miya (1916) 40 Bom. 64.  

2.      If it were permitted, it would defeat the provisions of any law

The consideration of an agreement would be unlawful if it is of such nature that if permitted, would defeat
the provisions of any law. (Section 23) 
 
Case-
a)    P let a flat to R of $1200 a year. To reduce the municipal tax he entered into two agreements with R.
One, by which the rent was stated to be $450 only and the other by which R agreed to pay $750 for services
in connection with the flat. In a suit filed against R to recover $750, it was held that the agreement was
made to defraud the municipal authority and was void and A cannot recover the money. Alexander v.
Rayson.

b)    A trading partnership consisted of more than 20 persons and it was not registered rendering it an
illegal association. A suit was brought for its dissolution. It was held that the suit would not lie for it would
defeat the provisions of the Companies Act. Mewa Ram v. Ram Gopal, (1926) 48 all, 735.  

c)    An agreement buy the debtor not to rise the plea of limitation, should a suit have to be filed,is void as
tending to limit the provisions of the Limitation Act (Rama Murthy vs Gopayya).  

3.      If it is fraudulent
An agreement, whose object or consideration is to fraud others, is unlawful and hence void. 

Example-
a)    A being agent for a landed proprietor, agrees for money, without the knowledge of his principal, to
obtain from B a lease of land belonging to his principal. The agreement between A and B is void, as it
implies a fraud by concealment by A on his principal to obtain for B a lease of land belonging to his
principal. 

Case-
a)    A, B and C enter into an agreement for the division among them of gains acquired, or to be acquired,
by them by fraud. The agreement is void, as its object is unlawful. [Illustration (e) to section 23].  

b)    Where the object of an agreement between A and B was to obtain a contract from the commissariat
department for the benefit of court , which could not be obtained for both of them without practicing fraud
on the department, it was held that the object of the agreement was fraudulent, and that the agreement
was therefore void. Shaib Ram Vs Nagar Mel, (1884) Punj. Record no 63.

In General
147. An agreement is not enforceable at law, and therefore does not result in acontract, if its
object is illegal.
We come now to deal with the only remaining element in the formation of a valid contract -
the legality of the matter or object of the agreement. To result in a contract, an agreement
must create anobligation; and it does not create an obligation if it is such that the courts
cannot enforce it. An agreement, therefore, which is illegal or unlawful, is infactno contract
at all, though it is often spoken of as an illegal contract.
As a rule the law does not interfere with the freedom of persons to enter into contracts, but
some limitations are imposed. Certain objects are forbidden, and though all the other
elements necessary to the formation of avalid contractmay be present, yet if one of these
forbidden objects is contemplated by the parties, the courts will not enforce their agreement.
The object makes the agreement unlawful.1
 

Classification Of Unlawful Agreements

148. For convenience in treatment, unlawfulagreementsmay be classified, according to their
matter or object, as
(a)Agreements in violation of positive law; and
(b)Agreements contrary to public policy.
The distinction here made between agreements in violation oi positive law and agreements
contrary to public policy is in the reasons which determine the law to hold the
agreementvoid, and not in thenatureor operation of the law itself. The nullity of the
agreement itself is in every case a matter of positive law;2 but in one class of cases the acts
contemplated by the agreement are prohibited by thecommon lawor by statute, while in the
other theprohibitionrests more particularly on public policy, or, as it is sometimes called, the
"policy of the law." It is not always easy to distinguish between the two classes, for frequent
decisions upon certain matters of public policy have established such definite rules regarding
them that they are ineffectrules of the common law. Too much importance, therefore, must
not be attached to any classification of the subject

Agreements In Violation Of Positive Law

149. Anyagreementwhich involves the doing of an act which is positively forbidden by law,
or, what amounts to thesamething, the omission to do an act which is positively enjoined by
law, is illegal andvoid. Acts may be so prohibited or enjoined
(a) By the rules of thecommon law; or
(b) By statute.
There are many acts which the law positively forbids or enjoins, and to the doing or omission
of which some penalty is attached.
1 Edgar Lumber Co. v. Cornie Stave Co., 05 Ark. 449, 130 S. W. 452; Piper v. Boston & M.
R. It., 75 N. H. 435, 75 Atl. 1041; Crigler v. Shepler, 101 Pac. 619, 23 L. R. A. (N. S.) 500,
79 Kan. 834. See "Contracts," Dec. Dig. (Key-No.) § 103; Cent. Dip. §§ 468-476.
2 Pol. Cont (3d Ed.) 251.
Whether theprohibitionor injunction is by the common law or by statute is altogether
immaterial. So it does not matter whether the act to be performed is malum in se or malum
prohibitum.8 The act or omission prohibited may be some grievous crime, such as murder; or
it may be an act or omission prohibited merely as a police regulation, as in the case of
statutes regulating the conduct of a particular trade orbusiness, with only a small fine as the
penalty; or again it may be only a civilwrong. All of these cases stand on the same footing. If
the subject-matter or object of an agreement is such that its performance would consist in an
act or omission so forbidden, or be, so connected therewith as to be in substance part of the
same transaction, the courts will not enforce it.
Same - Breach Of Rules Of Common Law
150. The agreements which are illegal because they are in breach of rules of the common law
are:
(a)Agreements involving the commission of crime; and
(b) Agreements involving the commission of a civil wrong.
This classification, like that in the preceding section, is, from thenatureof the subject, only
approximate, and for convenience in treatment. Many acts are prohibited by statute which
were formerly prohibited by the common law, and many acts which are prohibited by the
common law in onestateare prohibited by statute in another, and in some states there are no
common-law crimes at all. For this reason, in treating of agreements in breach of rules of the
common law we must includeagreements in breach of statuteswhich are merely declaratory
of the common law

Section 10 (Indian Contracts Act) states that all agreements are contracts if made for lawful considerations and with lawful object.
Considerations should be lawful, as otherwise, it would vitiate the whole contract and make it void. For example, A promises to pay B Rs
500/- if he commits a theft in C’s house. Such a promise will not be enforced by law even if B has committed a theft because the object of
consideration of the promise is unlawful.
Section 23 also lays down that every agreement of which the object or consideration is unlawful is void. It, therefore follows that every
contract, in order to be valid must be made for lawful consideration with a lawful object.
Illustrations of Lawful Considerations:
1) A agrees to sell his house to B for Rs 10,000. Here B’s promise to pay the sum of Rs 10,000 is the consideration for A’s promise to sell the
house, and A’s promise to sell the house is the consideration for B’s promise to pay Rs 10,000. These are lawful considerations.
2) A promises to pay B Rs 10,000 at the end of six months, if C who owes that sum to B, fails to pay it. B promises to grant time to C
accordingly. Here the promise of each party is the consideration for the promise of the other party and they are lawful considerations
3) A promises for a certain sum paid to him by B to make good to B the value of his ship if it is wrecked on a certain voyage. Here A’s
promises is the consideration for B’s payment and B’s payment is the consideration for A’s promise and these are lawful considerations.
4) A promises to maintain B’s child, and B promises to pay A Rs 1,000 yearly for the purpose. Here the promise of each party is the
consideration for the promise of the other party. These are lawful considerations.
Lawful considerations and lawful object distinguished:
Object of an agreement should be differentiated from consideration for an agreement. Object is different from consideration. Object means
purposes or design. However, certain difficulties are faced in practice to distinguish between the two, particularly when considerations consist
in a promise to do or not to do something.
The following illustrations will make the distinction clear between object and consideration:
Illustrations:
A promises to obtain or B an employment in the public services and B promises to pay A Rs 100/- The agreements is void as the
consideration being A’s promise to procure an employment in the public services is opposed to public policy and hence unlawful.
Illustrations of unlawful object:
1) A promises to drop a prosecution which he has instituted against B for robbery and B promises to restore the value of things taken. The
agreement is void as its object to save a robber from punishment is unlawful.
2) A, B and C enter into an agreement for the division among them of the gains to be acquired by them by fraud. Because object of the
agreements is to practice fraud on others, it is unlawful.
What is unlawful consideration?
In the following cases, the consideration or object of an agreement is unlawful:
1) it is forbidden by law; or
2) is of such a nature that, if permitted, it would defeat the provisions of any law; or
3) is fraudulent; or
4) involves or implies injury to the person or property of another; or
5) the court regards it as in moral or opposed to public policy.
An act promised to be done may be either unlawful to perform (illustrations (1) and (3) below); or the act may be lawful but law will not
enforce it for reasons of public policy like wagering agreements. Law means the law for the time being in force in India and includes Hindu
and Muslim laws.
\

Contract
Definition
An agreement creating obligations enforceable by law.  The basic elements of a contract
are mutual assent,consideration, capacity, and legality.  In some states, the element of
consideration can be satisfied by a valid substitute.  Possible remedies for breach of
contract include general damages, consequential damages, reliance damages,
and specific performance.  

Overview
Contracts are promises that the law will enforce. The law provides remedies if a
promise is breached or recognizes the performance of a promise as a duty. Contracts
arise when a duty does or may come into existence, because of a promise made by one
of the parties. To be legally binding as a contract, a promise must be exchanged for
adequate consideration. Adequate consideration is a benefit or detriment which a party
receives which reasonably and fairly induces them to make the promise/contract. For
example, promises that are purely gifts are not considered enforceable because the
personal satisfaction the grantor of the promise may receive from the act of giving is
normally not considered adequate consideration. Certain promises that are not
considered contracts may, in limited circumstances, be enforced if one party has relied
to his detriment on the assurances of the other party.

Contracts are mainly governed by state statutory and common (judge-made) law and
private law. Private law principally includes the terms of the agreement between the
parties who are exchanging promises. This private law may override many of the rules
otherwise established by state law. Statutory law may require some contracts be put in
writing and executed with particular formalities. Otherwise, the parties may enter into a
binding agreement without signing a formal written document. Most of the principles of
the common law of contracts are outlined in the Restatement of the Law Second,
Contracts, published by the American Law Institute. The Uniform Commercial Code,
whose original articles have been adopted in nearly every state, represents a body of
statutory law that governs important categories of contracts. The main articles that deal
with the law of contracts are Article 1 (General Provisions) and Article 2 (Sales).
Sections of Article 9 (Secured Transactions) govern contracts assigning the rights to
payment in security interest agreements. Contracts related to particular activities or
business sectors may be highly regulated by state and/or federal law. See Law Relating
To Other Topics Dealing with Particular Activities or Business Sectors.

In 1988, the United States joined the United Nations Convention on Contracts for the
International Sale of Goods which now governs contracts within its scope.

Formation[edit]

At common law, the elements of a contract are offer, acceptance, intention to create legal relations,
and consideration.

Not all agreements are necessarily contractual, as the parties generally must be deemed to have
an intention to be legally bound. A gentlemen's agreement is one which is not intended to be legally
enforceable, and which is "binding in honour only". [1]

Offer and acceptance[edit]

Main articles: Offer and acceptance and Meeting of the minds

In order for a contract to be formed, the parties must reach mutual assent (also called a meeting of
the minds). This is typically reached through offer and an acceptance which does not vary the offer's
terms, which is known as the "mirror image rule". If a purported acceptance does vary the terms of
an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the
original offer. The Uniform Commercial Code disposes of the mirror image rule in §2-207, although
the UCC only governs transactions in goods in the USA. As a court cannot read minds, the intent of
the parties is interpreted objectively from the perspective of a reasonable person,[2] as determined in
the early English case of Smith v Hughes [1871]. It is important to note that where an offer specifies
a particular mode of acceptance, only an acceptance communicated via that method will be valid. [3]

Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the

parties to the contract makes a promise[4] or set of promises to each other. For example, in a contract
for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller's
promise to deliver title to the property. These common contracts take place in the daily flow
of commerce transactions, and in cases with sophisticated or expensive promises may involve
extensive negotiation and various condition precedent requirements, which are requirements that
must be met for the contract to be fulfilled.

Less common are unilateral contracts in which one party makes a promise, but the other side does
not promise anything. In these cases, those accepting the offer are not required to communicate
their acceptance to the offeror. In a reward contract, for example, a person who has lost a dog could
promise a reward if the dog is found, through publication or orally. The payment could be additionally
conditioned on the dog being returned alive. Those who learn of the reward are not required to
search for the dog, but if someone finds the dog and delivers it, the promisor is required to pay. In
the similar case of advertisements of deals or bargains, a general rule is that these are not
contractual offers but merely an "invitation to treat" (or bargain), but the applicability of this rule is
disputed and contains various exceptions.[5] The High Court of Australia stated that the term
unilateral contract is "unscientific and misleading". [6]

In certain circumstances, an implied contract may be created. A contract is implied in fact if the

circumstances imply that parties have reached an agreement even though they have not done so
expressly. For example, a patient may implicitly enter a contract by visiting a doctor and being
examined; if the patient refuses to pay after being examined, the patient has breached a
contract implied in fact. A contract which is implied in law is also called a quasi-contract, because it
is not in fact a contract; rather, it is a means for thecourts to remedy situations in which one party
would be unjustly enriched were he or she not required to compensate the other. Quantum
meruit claims are an example.

https://en.wikipedia.org/wiki/Contract

https://www.law.cornell.edu/wex/contract

http://chestofbooks.com/business/law/Handbook-Law-Of-Contracts/Chapter-VIII-Legality-of-Object.html

http://mercantilelaws.blogspot.in/2013/01/what-is-legality-of-object.html

http://www.citeman.com/7416-what-is-legality-object-and-consideration.html
http://www.scribd.com/doc/27041470/Legality-of-Object-and-Consideration#scribd