Legality of Object and Void Agreements: Contingent, Wagering and Unlawful Agreements Questions

Question 1

What is meant by lawful object?

Accepted Answer

Lawful object means the purpose of an agreement must be legal and not forbidden by law or opposed to public policy.

Question 2

Define void agreement.

Accepted Answer

A void agreement is an agreement that is not enforceable by law.

Question 3

What is a contingent contract?

Accepted Answer

A contingent contract is a contract to do or not to do something depending on the happening or non-happening of an uncertain collateral future event.

Question 4

Define wagering agreement.

Accepted Answer

A wagering agreement is a bet where parties agree that on an uncertain event one will win and the other will lose, with no interest except stake.

Question 5

State one ground when consideration/object becomes unlawful.

Accepted Answer

If the object/consideration is forbidden by law, it becomes unlawful.

Question 6

State one example of void agreement.

Accepted Answer

An agreement to do an impossible act is a void agreement.

Question 7

State any three grounds on which consideration/object is unlawful.

Accepted Answer

Object/consideration is unlawful if (any three):

1) It is forbidden by law.
2) It is fraudulent.
3) It is opposed to public policy.

(Also: defeats provisions of law, causes injury, immoral.)

Question 8

Write any three examples/types of void agreements.

Accepted Answer

Examples of void agreements (any three):

1) Agreement in restraint of marriage.
2) Agreement with uncertainty.
3) Agreement to do impossible act.

(Also: restraint of trade, restraint of legal proceedings, wagering.)

Question 9

Explain contingent contract (any three points).

Accepted Answer

Contingent contract:

1) Depends on uncertain future event that is collateral to the contract.
2) Enforceable only on happening/non-happening of event as per condition.
3) Parties generally have real interest (e.g., insurance).

Question 10

Explain wagering agreement and state any three essentials.

Accepted Answer

Wagering agreement is a bet. Essentials (any three):

1) Uncertain event.
2) Mutual chance of gain or loss.
3) No other interest in event except stake.

(Also: promise to pay money/money’s worth.)

Question 11

Differentiate between contingent contract and wagering agreement (any three points).

Accepted Answer

Contingent vs wagering:

| Basis | Contingent | Wagering |
|---|---|---|
| Validity | valid (if lawful) | void |
| Interest | real interest | no interest except stake |
| Purpose | business/risk management | bet/gamble |

Question 12

Explain “opposed to public policy” in brief (any three points).

Accepted Answer

Public policy refers to agreements harmful to public welfare. Such agreements are void/unlawful.

Examples (any three):
1) Agreements interfering with administration of justice.
2) Agreements promoting corruption.
3) Agreements restraining lawful trade (general rule).

Question 13

Explain lawful object and lawful consideration and state when they become unlawful. Use a table and conclude.

Accepted Answer

For a contract to be valid, its object (purpose) and consideration (something in return) must be lawful. If either object or consideration is unlawful, the agreement becomes void/illegal and cannot be enforced.

| Ground of unlawfulness | Meaning |
|---|---|
| Forbidden by law | the act is prohibited by statute |
| Defeats provisions of law | indirectly violates law’s purpose |
| Fraudulent | intended to deceive |
| Causes injury | harms person or property |
| Immoral / opposed to public policy | harmful to society and public welfare |

Thus, lawful object and consideration protect society and ensure only legitimate business transactions are enforceable.

Question 14

Write a detailed note on void agreements and list common types with examples. Use a table.

Accepted Answer

A void agreement is an agreement that is not enforceable by law. Some agreements are void from the beginning because law does not allow them, while others become void due to uncertainty or impossibility.

Common types of void agreements:

| Type of void agreement | Why void | Example |
|---|---|---|
| Restraint of marriage | restricts freedom of marriage | condition not to marry |
| Restraint of trade (general) | restricts lawful trade | permanent ban on profession |
| Restraint of legal proceedings | restricts right to sue | clause preventing court action |
| Uncertainty | terms not definite | unclear price/terms |
| Impossibility | cannot be performed | impossible act |
| Wagering | mere bet on uncertain event | match betting |

Therefore, void agreements create no legal rights and cannot be enforced in court.

Question 15

Explain contingent contracts and wagering agreements. Differentiate them using a table and include examples.

Accepted Answer

A contingent contract is a valid contract (if lawful) that depends on an uncertain future event collateral to the contract. A wagering agreement is a bet where parties have no interest in the event other than winning or losing the stake.

| Basis | Contingent contract | Wagering agreement |
|---|---|---|
| Validity | valid (enforceable on event) | void (not enforceable) |
| Interest | real interest in subject matter | no interest except stake |
| Objective | risk management/business purpose | gambling/bet |
| Example | insurance contract | betting on match outcome |

Thus, the presence of genuine interest and business purpose makes contingent contracts lawful, while wagering agreements are void.

Legality of Object and Void Agreements: Contingent, Wagering and Unlawful Agreements

8 more questions to unlock