Section 23 of ICA : Section 23: What Considerations And Objects Are Lawful, And What Not

Explanation using Example

Example Application:

Suppose Mr. X enters into an agreement with Mr. Y, where Mr. X promises to sell his car to Mr. Y for INR 300,000. However, Mr. X is aware that the car has been stolen from someone else, yet he proceeds with the agreement. In this case, the consideration (the car) is unlawful because it involves the property of another person which has been acquired by theft.

According to Section 23 of the Indian Contract Act, 1872, this agreement would be void because the object of the agreement (the stolen car) is unlawful. It is forbidden by law to trade in stolen goods, and such a transaction would also involve injury to the person from whom the car was stolen.