What is Object and Consideration in Contracts

What is Object and Consideration in Contracts

Contracts, fundamental to both business and personal transactions, find their legal bedrock in the elements of object and consideration. This exploration delves deep into the legal intricacies, dissecting the definitions, unraveling the significance, and spotlighting the crucial roles these elements play in determining the overall legality of contractual agreements.

Understanding the nuanced interplay of object and consideration is paramount for ensuring the integrity and enforceability of contracts, forming the backbone of a robust legal framework that safeguards the interests of parties involved in diverse contractual relationships.

I. Object in Contracts:

The object of a contract is the fundamental purpose or objective that the parties intend to achieve through their agreement. It is a critical element as it defines the scope and nature of the contract. For a contract to be considered valid, the object must be lawful, specific, and possible.

A. Lawful Object:

The legality of the object is paramount for the enforceability of a contract. An object becomes unlawful when it involves activities contrary to the principles of morality, public policy, or existing laws. For instance, a contract to engage in illegal activities, such as drug trafficking or fraud, would render the entire contract void.

To illustrate, let’s consider a contract for the sale of a property. If the buyer intends to use the property for an illegal activity, such as setting up an unlicensed casino, the object of the contract becomes unlawful, and the contract loses its legal standing.

B. Specific and Possible Object:

The specificity and feasibility of the object are equally crucial. A contract must have a clear, definite object that is possible to perform. Vague or impossible objectives can lead to confusion and may render the contract unenforceable.

Consider a construction contract where the objective is to build a commercial complex. If the terms of the contract are unclear about the design specifications and the timeline for completion, disputes may arise, and the contract’s validity could be challenged.

II. Consideration in Contracts:

Consideration is the element that distinguishes a contract from a mere promise. It refers to something of value exchanged between the parties, a mutual give-and-take that ensures fairness and equity in the contractual relationship.

A. Requirement of Consideration:

Consideration is a foundational requirement for a valid contract. Both parties must provide something of value, creating a mutual obligation. This ensures that each party is bound by the contract, and the agreement is not merely a gratuitous promise.

In a typical business contract, the consideration is often monetary – one party pays money in exchange for goods or services. However, consideration can also take non-monetary forms, such as the promise to perform a certain act or the forbearance from taking a particular action.

B. Past Consideration:

While consideration is essential, it must be present at the time of making the contract. Past consideration, or actions that occurred before the contract was formed, is generally not considered valid. Courts are hesitant to enforce promises based on past actions as they lack the bargaining element that consideration is meant to provide.

For example, if Party A promises to pay Party B for services rendered a month ago without any prior agreement, this past consideration may not be legally enforceable.

III. Legality and Public Policy:

The legality of the object and the presence of consideration serve not only the interests of the parties involved but also the broader interests of society. Contracts that contravene laws or public policy are deemed unenforceable, reflecting the legal system’s commitment to maintaining fairness, equity, and the overall well-being of the community.

A. Restraint of Trade:

Contracts that impose unreasonable restraints on trade or restrict a person’s ability to engage in a lawful profession or trade are generally against public policy. Courts carefully scrutinize such agreements to ensure they strike a balance between protecting legitimate business interests and preserving healthy competition.

Consider a non-compete clause in an employment contract that prevents an employee from working for a competing business for an unreasonably long period or in an overly broad geographic area. Such clauses might be deemed unenforceable as they excessively limit the employee’s future job prospects.

B. Unconscionable Contracts:

Contracts that are unconscionable, where one party takes advantage of the other’s weakness or vulnerability, are likely to be invalidated by the courts. The doctrine of unconscionability aims to prevent unfair and oppressive contractual terms that exploit the power imbalance between parties.

For instance, a contract where a financially distressed individual sells a valuable asset for a fraction of its actual value, without fully understanding the implications, may be considered unconscionable. Courts may intervene to set aside such contracts to protect the vulnerable party.


In conclusion, the legality of object and consideration is the bedrock of contractual agreements. A lawful object, coupled with valid consideration, ensures that contracts are binding, fair, and contribute to the overall stability of commercial and personal relationships. As contracts play a pivotal role in shaping transactions, it is crucial for parties to draft agreements that adhere to legal standards, promoting confidence in their enforceability and validity. By understanding the nuances of object and consideration, individuals and businesses can navigate the complex terrain of contractual relationships with clarity and legal assurance.

Leave a comment