Section 24 of indian contract act

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Contracts and agreements are by far the most widely used legal devices and to some extent also govern most of our social relationships. However, those agreements which are legally enforceable can be termed as contracts whilst those which are unenforceable by law are called void agreements. These agreements are generally those which are concerned with immoral elements or go against the public policies of the state. Section 2(g) of the Indian Contract Act, 1872 defines void agreements. Further, Sections 24 to 30 and 56 of the Act specify the particular kinds of agreements/contracts which are void. Since a void agreement is meaningless in the eyes of law, it does not cause any change in the position or relationship of the contracts.

Agreements in which a part of consideration or object is unlawful This is mentioned in Section 24 of the Act. The basic essence of this statement is that if the consideration, as a whole or in part is unlawful or if the end product of the agreement is illegal then the agreement is declared void. The contract would, however, be considered valid after deleting the unlawful clauses. For example, if there is an agreement between A and B for the exchange of drugs and medicinal herbs for ₹5000, then the agreement stands void even though the consideration of the agreement is legal. This is because the object of the agreement is illegal. But in this case, if we remove the drugs from the object then the agreement would be termed valid.

Moreover, if transaction which arises out of an unlawful act is such that if they are separated from the illegal part, then they would count as a valid agreement, then those transactions hold value in the eyes of law irrespective of the illegality of the agreement [1].

Agreements without consideration Section 2(d) of the Indian Contract Act, 1872, states, consideration may be furnished by ‘the promisee or any other person’ as long as it is ‘at the desire of the promisor’. In the case of Currie v. Misa, the court defined valuable consideration as “in the sense of the law may consist either in some right, interest, forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”. Section 25 of the Act mentions that all agreements devoid of consideration would be declared void unless they fall into the following categories:

If the agreement is made out of natural love and affection This is the first exception mentioned under Section 25(1). In Rajlukhy Dabee v Bhootnath Mookerjee [2], the Hon’ble court had held that “A written and registered agreement which is based on natural love and affection between kins is enforceable without consideration”. Examples of this involve a daughter taking care of her father [3], a brother giving away property to his siblings, etc. Essentials of an agreement like this involve [4]:

The agreement made out of natural love and affection; The agreement is registered; The agreement is in writing; Parties are in close relation to one another. The person has already done something voluntarily for the promisor This is mentioned in Section 25(2) of the Act. Under this, the promisor performs the act in order to compensate the promisee either wholly or partially for some previously performed voluntary act of the promisee. For example, if there’s a contract between A and B where A’s expenses are taken care of by B for taking care of his son, then, it must be noted that the service provided wasn’t voluntary as B was legally bound to support his infant son. As per this exception, the promise must be to compensate a person who has himself done something for the promisor and not to a person who has done nothing for the promisor [5].