Question

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.

• A. The contract will be void because BCCI is not a party to it
• B. The contract will be void since the object of the contract is to cause a loss to the BCCI
• C. The contract will be void since the maximum number of parties to contract as per Indian law is 10
• D. The contract will be valid

Answer 1

Answer: (B)

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

Section 23 states "The consideration or object of an agreement is lawful, unless— it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful.

In this case it is immoral which will lead BCCI to have a loss and hence the contract is void