Agreements Opposed to

Public Policy
A presentation by Nabeela Ahmed
2 Contents

 Agreements Opposed to Public Policy

 Agreements Creating Interest Against Duty
 Agreements Tending to Create Monopolies
 Agreement to Commit a Crime
 Agreements in Restraint of Parental Rights
 Agreements Restricting Personal Liberty
 Agreement to Defraud Creditors

A presentation by Nabeela Ahmed

3 Agreements Opposed to Public Policy

 An agreement which is opposed to “Public Policy” cannot be

enforced by either of the parties to it. Public Policy is the “Policy of
the Law”. The question as to whether an agreement is opposed to
public policy or not is to be decided on general principles only and
not by considering the terms of any particular contract.
 The Courts ought to be very cautious in deciding a question of
public policy. The doctrine must be applied with necessary
variation. Each case has to be decided on its own facts. Some of
the agreements which are opposed to public policy are briefly
explained below with examples.

A presentation by Nabeela Ahmed

4 Agreements Opposed to Public Policy
(Cont.)

 Trading with Enemies

All trade with enemies is against public policy. Thus, it is unlawful and is void.
However, if a contract is made during peace times and later on war breaks
out, one of the two things may result, Either the contract is suspended or it
stands dissolved depending upon the intention of the parties to contract.
 Traffic in Public Offices
Agreements entered into for using corrupt influence in procuring Government
jobs, titles or honours are unlawful and therefore are not enforceable. This is
because, if such agreements are valid, corruption will increase and lead to
inefficiency in public services.
Example: A paid B, a public servant a certain sum of money inducing him to
retire from service, this paving the way for A to be appointed in his place. The
agreement was held to be void.
A presentation by Nabeela Ahmed
5 Agreements Opposed to Public Policy
(Cont.)

 Maintenance and Champerty

Maintenance and champerty agreements are against public policy. So they
are void. Maintenance agreements are those agreements whereby a person
promises to maintain a suit in which he has no interest. Champerty agreement
is one whereby a person agrees to share the results of litigation.
The difference between maintenance and champerty agreements lies in their
object. The object of maintenance agreement is to encourage or foment
litigation, whereas the same in Champerty agreement is sharing the proceeds
of the litigation.
In England, both of these agreements are illegal and unenforceable.
However, in India, only those agreements which appear to be made for
purposes for gambling in litigation and for injuring or oppressing others, by
encouraging unholy litigation, will not be enforced but not all maintenance
and champerty agreements.

A presentation by Nabeela Ahmed

6 Agreements Creating Interest Against
Duty
If an agreement is entered into by a person whereby he is
bound to do something which is against his public duty,
the agreement is void on the ground of public policy. For
e.g., an agreement by an agent to get secret profits shall
be void as it is opposed to public policy. Similarly, an
agreement by a Government servant for the purchase of
land situated within his circle is illegal as opposed to public
policy.

A presentation by Nabeela Ahmed

7 Agreements Tending to Create
Monopolies
Agreements tending to create monopolies are against
public policy and hence are void. However, in matter like
vegetables, monopoly rights can be given to one person
excluding others.

A presentation by Nabeela Ahmed

8 Agreements to Commit a Crime

If in an agreement, the consideration is committing a

crime, the agreement is opposed to public policy and is
void. Similarly, an agreement to indemnify a person
against consequences of his criminal act is unenforceable
being opposed to public policy.

A presentation by Nabeela Ahmed

9 Agreements to Defraud Creditors

An agreement which is made with an intention to defraud

the creditors or revenue authorities is not enforceable as it
is opposed to public policy.

A presentation by Nabeela Ahmed

10

Thank You

A presentation by Nabeela Ahmed