Section 24 Contract Act: Agreements void, if considerations and objects unlawful in part

Section 24 of Indian Contract Act: Agreements void, if considerations and objects unlawful in part

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void .

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Consideration Sec 2(d) Agreement Sec 2(e) Contract Sec 2(h)

Legal Commentary & Landmark Judgments: Section 24

Section 24 of the Indian Contract Act, 1872 enacts the doctrine of inseverability of unlawful consideration, declaring an agreement void if any part of a single consideration or object is unlawful.

Core Legal Standard: Section 24 provides that if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the entire agreement is void.
Operational Mechanism: It establishes that where lawful and unlawful parts of a consideration cannot be severed without rewriting the contract, the whole promise falls.

Conversely, where covenants are distinct and separate consideration is apportioned to each, the lawful covenants survive under the blue-pencil doctrine (Sections 57 and 58).

Key Landmark Precedents:

Alice Mary Hill v. William Clarke (1905) ILR 27 All 266: The Allahabad High Court held that where an agreement promised a monthly allowance for housekeeping and cohabitation (adultery), the consideration was inseverable and unlawful, rendering the entire contract void under Section 24.
BOI Finance Ltd v. Custodian (1997) 10 SCC 488: The Supreme Court ruled that where valid contracts contain incidental terms violating statutory directives, severance is permissible if the illegal stipulation does not form the core consideration of the bargain.

Legal Commentary:

To insulate commercial contracts from total invalidation under Section 24, commercial drafters routinely insert standard severability clauses. However, contractual severability clauses cannot save an agreement if the lawful and unlawful aspects share a single indivisible consideration.

Section 24: Agreements void, if considerations and objects unlawful in part

Section 24 of Indian Contract Act: Agreements void, if considerations and objects unlawful in part

Legal Commentary & Landmark Judgments: Section 24