Question

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.

Principle: The object of an agreement is lawful unless it is forbidden by law; is of such a nature that, if permitted, it would defeat the provisions of any law; is fraudulent; involves or implies injury to the person or property of another person; the court regards it as immoral; it is opposed to public policy.

Factual Situation: The BCCI decided to hold an auction to sell IPL teams. 12 bidders registered for the auction. Unknown to the BCCI, these 12 bidders had entered into a contract that they would not bid more than a certain amount.

विकल्प

• The contract will be void because BCCI is not a party to it

• The contract will be void since the object of the contract is to cause a loss to the BCCI

• The contract will be void since the maximum number of parties to a contract as per Indian law is 10

• The contract will be valid

Answer 1

The contract will be void since the object of the contract is to cause a loss to the BCCI

Explanation:
 The bidders by entering into the contract wanted to cause loss to the BCCI. This is against the given principle of bidding and against the public policy so the contract entered is void. Therefore option "The contract will be void since the object of the contract is to cause a loss to the BCCI" is the most appropriate choice.