Discuss what constitute lawful Consideration and lawful objects under the Indian Contract Act, 1872 along with the case law: Carlill vs. carbolic Smoke Ball Company.

Under the Indian Contract Act, 1872, for a contract to be valid, it must contain lawful consideration and lawful objects. Let's discuss what constitutes lawful consideration and lawful objects, along with the landmark case law of Carlill v. Carbolic Smoke Ball Company:

1. Lawful Consideration:

• Lawful consideration refers to something of value exchanged between the parties to a contract. It can be in the form of money, goods, services, or promises to do or abstain from doing something.
• Consideration must be lawful, meaning it must not involve any illegal, immoral, or fraudulent activity. It must also have some value in the eyes of the law, although it need not necessarily be adequate in commercial terms.
• Consideration may be past, present, or future, provided it is given at the desire of the promisor and is not something that the promisor is already legally bound to do.
• If a contract lacks consideration, it is generally considered to be gratuitous and not legally enforceable.

2. Lawful Objects:

• Lawful objects refer to the purpose or subject matter of the contract. For a contract to be valid, its object must be lawful and not opposed to public policy or prohibited by law.
• Objects that are illegal, immoral, fraudulent, or involve acts that are against public policy are considered unlawful and render the contract void ab initio (from the beginning).
• Contracts with unlawful objects are deemed to be void and unenforceable by law. Parties cannot enforce rights or obligations arising from contracts with unlawful objects.

Case Law: Carlill v. Carbolic Smoke Ball Company (1893):

• In the famous case of Carlill v. Carbolic Smoke Ball Company, the defendant company advertised that it would pay £100 to anyone who used their product, a smoke ball, as directed and still contracted influenza. The advertisement also stated that £1000 had been deposited in a bank to demonstrate the company's sincerity.
• Mrs. Carlill used the smoke ball but still contracted influenza. She sued the company for the reward, claiming that she had acted upon the company's advertisement.
• The court held that the advertisement constituted a unilateral contract, and Mrs. Carlill's act of using the smoke ball in accordance with the terms of the advertisement constituted valid consideration. The court found that the promise to pay the reward was a unilateral promise, and Mrs. Carlill had provided consideration by using the product as directed.
• This case is significant as it established the principle that unilateral contracts can be binding if they are supported by valid consideration. It also illustrates the importance of clear and unambiguous offers and acceptance in contract law.

In summary, lawful consideration and lawful objects are essential elements of a valid contract under the Indian Contract Act, 1872. They ensure that contracts are enforceable, fair, and consistent with public policy. The case of Carlill v. Carbolic Smoke Ball Company serves as a landmark case in contract law, illustrating the principles of valid consideration and unilateral contracts.