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Principle: a Contract Would Be Invalid and Unlawful If the Contract is for Any Immoral Or Illegal Purpose. - Legal Reasoning

MCQ

Consists of legal proposition(s)/  principle(s) (hereinafter referred to as 'principle') and facts. Such principles may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.  
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.  
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option. 

Principle: A contract would be invalid and unlawful if the contract is for any immoral or illegal purpose.

Facts: P, was a young and helpless widow, living on the pavement. R, a neighbor gave her a house, registered in her name, on the condition that she should allow R to keep his smuggled goods and drugs in her house. After the registration was done, according to the condition in the contract, R’s agents went to keep some packets in her house, she refused. R told her the condition under which the house was given to her. She still refused. Is P justified in her action?

Options

  • As R was making the contract for illegal activities, P's stand is valid in law. 

  • R can take back the house by cancelling the transfer deed.

  • P is not justified as she did not have the right to deny  R's request. 

  • P is right as she did not like smuggled goods to be kept in her house. 

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Solution

As R was making the contract for illegal activities, P’s stand is valid in law

Explanation:

As R was making the contract for illegal activities, P's stand is valid in law. The conditions made by R were illegal in nature. Such conditions made the contract invalid and unlawful. The contract does not stand valid in the court of law. 

Concept: Indian Contract Act (Entrance Exams)
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