Principle A contract would be invalid and unlawful if the contract is for an immoral or illegal purp...........

Indian Contract Act (ICA)1872 Valid and Void Contracts

Principle: A contract would be invalid and unlawful, if the contract is for an immoral or illegal purpose.

Facts: P, was a young and helpless widow, living on the pavement. R, a neighbour gave her a house, registered in her name, on the condition that she should allow R to keep his smuggled goods and drugs in her house. After the registration was done, according to the condition in the contract, R’s agents went to keep some packets in her house, she refused. R told her the condition under which the house was given to her. She still refused. Is P justified in her action?

P is not justified as she did not have the right to deny R’s request.

As R was making the contract for illegal activities, P’s stand is valid in law.

R can take back the house by cancelling the transfer deed.

P is right as she did not like smuggled goods to be kept in her house.

Explanation:

The very point of giving her a favour of having a house in her name would give her a security but an obligation as well that P has to co-operate with R for smuggling of illegal materials and she could not even refuse for the nature of their relationship. But as mentioned clearly in the contract that transferring of illegal material will make the contract invalid or void which gave her a triumph in this situation. As R was making the contract for illegal activities, P’s stand is valid in law.