The Contract Act of 1872 in India defines an agreement as ‘every promise and every set of promises forming the consideration for each other.’ An agreement is considered lawful if it is made by the free consent of the parties competent to contract, for a lawful consideration, and with a lawful object. However, if any of these elements are missing, the agreement becomes unlawful.
An unlawful agreement is one that is not valid and enforceable under the law. It is illegal and goes against the principles of justice and morality. The Contract Act categorizes unlawful agreements into two types – void agreements and voidable agreements.
Void agreements are those that are not enforceable by law from the beginning and are void ab initio. These agreements lack essential elements such as free consent, lawful consideration, and lawful object. The Contract Act states that a void agreement is ‘no contract at all’ and cannot be enforced by any party.
On the other hand, voidable agreements are those that are enforceable by law initially, but one of the parties has the option to avoid it. These agreements are made under certain circumstances such as coercion, undue influence, fraud, misrepresentation, or mistake. The party affected by any of these factors has the right to avoid the agreement.
An unlawful agreement is a serious legal issue that can have serious consequences. It is important to understand the factors that make an agreement unlawful to ensure that you do not enter into such an agreement.
Coercion is the use of force or threat to make someone enter into an agreement against their will. If an agreement is made under coercion, it is considered unlawful. Undue influence is the use of power or dominance by one party over the other to influence their decision-making ability. An agreement made under undue influence is also unlawful.
Fraud occurs when one party intentionally conceals or misrepresents information to the other party to induce them to enter into an agreement. Misrepresentation is when one party makes a false statement about a material fact that induces the other party to enter into an agreement. Both fraud and misrepresentation make the agreement unlawful.
Finally, a mistake occurs when one party makes an error in understanding a fact essential to the agreement. If the mistake is mutual, the agreement becomes void. If it is a unilateral mistake, the agreement remains valid.
In conclusion, it is essential to ensure that any agreement you enter into is lawful. By understanding the elements of a lawful agreement and the factors that make an agreement unlawful, you can protect yourself from any legal issues that may arise from an unlawful agreement. Remember to always seek legal advice before entering into any contractual agreement to ensure that it is valid and enforceable.