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    Question

    Rahul makes a contract with Ajay to beat his business

    competitor. This is an example of
    A Illegal agreement Correct Answer Incorrect Answer
    B Valid contract Correct Answer Incorrect Answer
    C Unenforceable contract Correct Answer Incorrect Answer
    D Voidable contract Correct Answer Incorrect Answer

    Solution

    Contract Act An illegal agreement is forbidden by law (as per section 23 of the Indian Contract Act, 1872). Agreements are said to be illegal if the performance or formation of the agreement causes the parties to engage in activity that is illegal. The illegality must relate directly to the subject matter creation of the contract and not some intervening circumstance. An illegal agreement is not a contract at all, and courts will not enforce them. Thus, they are said to be “forbidden by law” or “unenforceable”.

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