17. The relevant figures in Article 23: (e) A, B and C conclude an agreement on the distribution of the profits which they have acquired or are to be acquired through fraud. The agreement is cancelled because its purpose is illegal. (g) A, who is an agent of a landowner, undertakes to receive, for money, without the knowledge of his client, a lease of land belonging to his principal. The agreement between A and B is inconclusive, as it involves fraud by concealing A from its sponsor. 3. In Re: K.L. Gauba (23.04.1954 – BOMHC) [AIR 1954 Bom 478]. paragraph 11: „. The freedom of the citizen, as well as the freedom of the lawyer to enter into a contract, are always governed by considerations of public order, as discussed on page 23 of the Indian Contract Act. This freedom is also subject to the other considerations of Article P. 23.“ Apart from the participation of money and other material benefits normally exchanged in a contractual agreement, there are several other cases where consideration takes other forms.
Some of these examples are attached here – so when does this essential characteristic of a new consideration not exist? An agreement was reached between the parties to simply postpone the registration of the lease of the deed. In such circumstances where the Savai Amdani was concealed to reduce the valuation of property income, the court found that it violated the provisions of the Registration Act, the Stamp Act, and the Transfer of Property Act. Assuming B commits an unlawful act against A, which causes $5,000 in damages and $3,000 in punitive damages. As there is no guarantee that A would win against B if tried, A may agree to drop the case if B pays damages of $US 5,000. This is sufficient consideration, as B`s counterpart is a guaranteed recovery and A takes into account the fact that B has to pay only $5,000 instead of $8,000. Consideration can be considered as the notion of value offered and accepted by persons or entities entering into contracts. Anything promised by one party of the other in a contract can be treated as „consideration“: for example, if A signs a contract to purchase a car from B for 5,000 $US, A`s counterpart is $US 5,000 and B`s counterpart is the car. „. A cancelled contract is a contract that has no legal effect.
An illegal contract similar to the unsigned contract in that it also has no legal effect between the direct parties has the additional effect that the transactions guaranteed to it have also been vitiated by illegality and that, therefore, we are not enforceable in certain circumstances. Where an agreement is only a guarantee for another agreement or constitutes aid which facilitates the execution of the object of the other agreement, which is not legally concreteised but is not prohibited by law, it may be applied as a subsidiary convention. On the other hand, if it is a mechanism intended to enforce the law actually prohibited, it cannot duet a right to the agreement, since it is vitiated by the illegality of the objective to be achieved, as set by law. . . .