What agreements are void under Section 23?
Asked by: Dr. Laury Jacobi V | Last update: May 10, 2026Score: 4.7/5 (52 votes)
Under Section 23 of the Indian Contract Act, 1872, agreements are void if their object or consideration is unlawful, meaning it's forbidden by law, defeats legal provisions, is fraudulent, involves injury to a person or property, or is considered immoral or against public policy by the court. Such agreements are unenforceable from the outset (void ab initio).
What is void agreement under section 23?
Section 23 says that the consideration or object of the agreement is unlawful if it “is fraudulent”. If the plaintiff cannot make out his case except through an immoral transaction to which he was a party, he must fail. An agreement to pay a certain sum of money to a prostitute for cohabitation is void.
Which types of agreements are void?
Void agreements are those agreements which are not enforced by law courts. Section 2(g) of the Indian Contract Act defines a void agreement as, “an agreement not enforceable by law”. Thus the parties to the contract do not get any legal redress in the case of void agreements.
What are some examples of void agreements?
Real-world examples
Here are a couple of examples of void contracts: A contract for the sale of illegal drugs is void because the subject matter is illegal. A contract made by a person who is declared mentally incompetent is void due to lack of capacity (hypothetical example).
What agreements expressly declared void?
Agreements Expressly Declared Void
Any agreement that restricts a person from marrying is void. Agreements that restrain anyone from exercising a lawful profession, trade, or business are void. Agreements that are so uncertain that their meaning cannot be determined are void.
Void agreements - Section 23 | Indian Contract Act #ggsipu
When can a contract be declared void?
The contract can also be considered void if an unlawful object or consideration is involved in the agreement. This can include the promise of sex, an illicit substance, or anything else causing one or both parties to break the law.
What is an example of an agreement discovered to be void?
Example: - A agrees that if B pays him 50,000/- he will not marry such an agreement is a void agreement. An agreement by which any person is restrained from plying a trade or practicing a legal profession or exercising a business of any kind is an expressly void agreement.
What are 6 things that void a contract?
We'll cover these terms in more detail later.
- Understanding Void Contracts. ...
- Uncertainty or Ambiguity. ...
- Lack of Legal Capacity. ...
- Incomplete Terms. ...
- Misrepresentation or Fraud. ...
- Common Mistake. ...
- Duress or Undue Influence. ...
- Public Policy or Illegal Activity.
What are three things that can cause a contract to be void?
Now that you have a grasp of what makes a contract valid, let's delve into what can make one void.
- Lack of Capacity.
- Illegality of Contract's Purpose.
- Absence of Mutual Assent.
What is an example of an agreement not declared void?
Sale of Goodwill- If a person sells his goodwill along with the business, then the buyer can restrain the seller from practising the same business within local limits. Such an agreement will be deemed valid and it is an agreement not expressly declared void.
What are the three types of agreements?
Business Law: Understanding Different Types of Agreements and Their Classifications 📜
- Based on Obligation 🤝 Unilateral Agreement: ...
- Based on Mode of Creation ✍️ Express Agreement. ...
- Based on Enforceability ⚖️ Enforceable Agreement. ...
- Based on Performance 📝 Executed Agreement.
What is an example of an illegal agreement?
The classic example of such an agreement is an agreement to commit a crime. For example, entering into a contract for murder is itself illegal because that very act can be prosecuted as the crime of conspiracy to commit a murder.
How does Section 23 impact wagering agreements?
It has been laid down by the Supreme Court, in Gherulal Parekh v. Mahadeo Das that though a wager is void and unenforceable it is not forbidden by law . Hence a wagering agreement is not unlawful under section 23 of the Contract Act and therefore the transactions collateral to the main transaction are enforceable.
What is the law of contract cap 23?
No suit shall be brought whereby to charge any person upon or by reason of any representation or assurance made or given concerning or relating to the character, conduct, credit, ability, trade or dealings of any other person, to the intent or purpose that such other person may obtain credit, money or goods, unless ...
Under what circumstances can a contract be voided?
In contract law, “null and void” means the contract has no legal force or effect and is treated as if it never existed. Such a contract cannot be enforced by either party due to factors like illegality, lack of consent, or incapacity.
What are four types of mistakes that can invalidate a contract?
Four types of mistakes that can invalidate a contract, making it void or voidable, include Mutual Mistake (both parties share the same fundamental error), Unilateral Mistake (one party is mistaken, and the other knows or should know), Common Mistake (a shared error about the existence or quality of the subject matter, often rendering the contract void), and mistakes involving Misrepresentation or Fraud, where one party is misled by false statements about essential facts, though technically not just a "mistake" but a vitiating factor often grouped with them.
Which agreements are void?
An agreement to carry out an illegal act is an example of a void agreement. For example, an agreement between drug dealers and buyers is a void agreement simply because the terms of the contract are illegal. In such a case, neither party can go to court to enforce the contract.
Under what circumstances does the agreement become void?
A contract which provides to do an impossible act is void. It will also be void when it becomes impossible to do an act stated in the contract due to the occurrence of an event beyond the control of the party.
What makes a contract not legally binding?
An Unenforceable Contract Might Have Been Signed Under Duress. The parties to a contract should be signing it voluntarily. However, one party might force another person to sign a contract. The act of forcing someone to do something they ordinarily would not do is duress.
How to nullify an agreement?
A contract can be nullified through mutual agreement between the parties involved. This is typically known as mutual rescission, where both parties agree to cancel or modify the contract. For this to happen, both sides must consent to the dissolution, acknowledging that they no longer wish to be bound by its terms.
What makes something legally void?
The term "void" refers to something that is legally ineffective or without force. This can apply to statutes, contracts, or court rulings that are deemed invalid. For instance, a law declared unconstitutional by an appeals court is considered void.
How to prove a contract is void?
Void Indicators: Contracts are void if they contain clauses indicating illegal acts, lack of mutual consent, or involve parties who lack the capacity to make a legally binding agreement (e.g., minors or those with mental incapacity).
What is an illegal agreement?
An illegal agreement is a contract or arrangement that is against the law. Examples include agreements to engage in illegal activities, agreements that are against public policy, and agreements that are fraudulently entered into. Such agreements are not enforceable in a court of law.
What are the grounds for a void contract?
Lack of capacity: If a party to the contract cannot understand the contract, such as a minor or person under the influence of alcohol, the contract may be void. Lack of assent: Contracts must have a genuine agreement. If a contract is formed under duress or threats, undue influence, or fraud, it's generally void.