This article is written by Geetika Sukhwal, a law student at Symbiosis Law School Noida. The article deals with Agreements Opposed to Public Policy. 

Introduction

Some agreements or contracts are said to oppose public policy if they promote breach of the law of land, or of the policy underneath an agreement or seems to degrade or injure the state or its citizens. The term “Public Policy” can also be referred to as what like minded people will think of certain acts and laws. Certain laws are said to be void as they fall under the category of public policy. Public policy is such a coherent instrument through which no government is bound to take decisions against the policies of the public. Public Policy will have a foreign element present in it, by the way, it involves deception or betrayal grounds for legal consequences.

It can also be constituted on the principles of social laws. It can also affect the legality of an agreement as it is an injury to the public good. Public policy is either laws or actions of the state which regulate traditional, cultural, ethical ideals, norms of the society, practices prevalent etc. Even if some laws are to be made then first of all the government needs to check if that law or act doesn’t violate the principles of public policy. It should be beneficial for people. There are many such examples through which the contract or agreement stands void as the court may refuse to enter into such contracts or agreements, by the virtue of it, falls under the category of illegal behavior. Court doesn’t want to encourage practices that may lead to deterioration of the nation or depletion of rights and laws. Many times some decisions are taken in favor of some groups like employees, children, women, senior citizens, and even for differently abled people so as to meet the desire of them and protect their rights and interests accordingly. Public policy may also play a vital role in encouraging equality among the citizens for their betterment by providing equal treatment for all and providing upliftment and protection of the country. 

If the said government makes some laws and the people cannot accept those laws as it harms their moral ethics, tradition or culture etc. then it is very difficult for the government to implement it as they had to keep in mind the social basis of the country. As India is a country of diverse culture and heritage and people are more connected towards their religious beliefs, cultural and traditional aspects so the government has to make laws and act accordingly.

The Gherulal Parakh vs. Mahadeodas Maiya the Supreme court observed that the doctrine of public policy is a branch of common law and like any other branch of common law, it is governed by precedents.

Explanation:

There are many instances where the definition and explanation of the term “Public Policy” has been varied. Public policy differs according to circumstances and situations.

1.  Interference with course of justice

Any agreement with judges, or officers of justice is declared void by applying unreasonable influence in changing the decision or wavering of the liabilities from the accused or by interfering with the court proceeding may led the agreement void. Agreements or contracts that are causing infringement of a statue or violative of public policy will not be enforced by law.

Example-

A paid rupees 50,000 to B, a judge in the court for changing his decision, favouring A so that he can be bailed irrespective of criminal charges. This type of conduct may lead to void agreement which is opposed to public policy. 

2.  Trading with enemy

Any agreement done by two parties  in different countries at the time of war with another country  then that agreement will be considered as void. The agreements will only come into force when there is peace between the countries.[2] If a situation arises where the parties had agreed with the agreement but at the time of execution the countries were at war, this would also amount to void and the agreement will stand still.

Example –

A signed a deal with B, a citizen of Pakistan to send certain goods to India on a specific date. Later, the government of India declared war with Pakistan and then the whole transaction will become void on the ground of dealing with the enemy.

3.  Suicide

In many prominent countries like England, suicide commission by person with sound mind is known as felode se[3] is said to void in claims of the person who has committed suicide are not entitled to insurance claims as it is opposed to the public policy as he committed such actions intestate.

Example –

A agreed to pay D, a sum of rupees 1,00,000 for committing suicide and in consideration A will send D’s soul in heaven. This agreement is void on account of being opposed to public policy.

4.  Agreement intending to create interest against duty

Agreement which binds or forces government servants to not perform the duty. So as to indulge in corrupt practices. If any individual enters into a contract or agreement with a public servant which is inconsistent with public policy. Such agreements are void. Examples of such agreements are bribing the officer, dealing in such activities, opposed to public morality or which can affect the integrity of the nation.

Example –

Agreements which will later constitute secret profits to agentmay declare the agreement void aas it is opposed to public policy.

5.  Sale of Public Offices

Agreement which affect public offices and appointments of officials, in public dealing may lead to the invalidation of agreement. Many people practice the selling of the positions which are recommended for the government employees but by the virtue of corruption they tend to sell those seats with hefty sums of money. Such types of agreements are opposed to the public policy as equal opportunity should be granted and this would amount to unfair for those who struggled.

Example –

A paid some amount of money to B, a public servant forcing him to retire him from services, so that the vacant seat of B can be filled by A. This agreement is void.

6.  Waiver of Illegality

Some agreements which tend to waive an illegality may be considered void as declared in public policy. The evidence provided by one side or the other, if illegality appears then it amounts to void agreement, being opposed to public policy. Many evidence are tainted on the basis of waiving of obligation which is immoral. It may also be as the original contract.

Example –

A and B were rival shopkeepers in Surat. B paid rupees 50,000 for forcing A to close down his business as A was making more profits than B. This agreement is void as it is against public policy.

7.  Marriage Procurement Contract

Agreements done with regard to marriage which impose unreasonable restriction, reward or if a stranger is appointed to procure his wife and pay some amount of money make the agreement opposed to public policy. Marriages done without the consent or with force for obtaining unfair advantage, or doing business may lead marriage void on the ground of agreement opposed to public policy.

Example –

A was promised Rs.200 in consideration for procuring another wife for C. A filed a suit against B for the recovery of the amount. Later, the court held that the agreement was not enforceable as it amounts to a marriage brokerage contract and the suit was dismissed.

In the article of Edward Q keabey it is mentioned about the laws which are made for providing legal assistance to enterprises which have been condemned in different states, which should not be violative of public policy & should not fall in the agreements restraint of trade. Corporations with huge amounts of property, rapid growth, vast enterprise, etc. should be controlled & managed & trading with rival enterprises for small amounts of money may lead to outburst.

Commission agreements

From private contract to public policy

Nicholas Miranda

The Yale Law Journal vol. 117, no.3 (Dec 2007) pp.510-549

According to the author there are many agreements between government & other countries which failed to provide the expected result as to why they contracted provided the subject matter, infrastructure, monetary profits, agreements fails because of the traditional concerns which the parties construct for their non-economic relevance which according to them may oppose public policy.

3. Law of restrictive /negative covenants in contract of employment & their specific performance: case for legislative reform – Rajasi clerk

Journal of the Indian law Institute vol. 38, no.1 (Jan march 1996) pp. 83 89

According to the article, there are mentions of examples which states about opposing the public policy where the condition of labor has been hampered by not providing them facilities which include lack of services, low wages, lack of sanitation, forced labor beyond their time rendering them with harsh treatments etc. No such laws, rules, decisions should affect those marginalized groups.

Conclusion

Public policy is the right way to set things for like-minded people as to what opinion they have about a certain law, made by the government as in the long run what should be the right way for future generation laws should be made inconsistent with the particular obligation. Public policy is one such instrument through which people in today’s society can shape tomorrow’s world government can maximize the well-being of the citizens therefore policies are made which do not violate public policy. Public policy may tend to harm the state or its citizens. By extending restrictions which are not relevant to the fact but just for moral customs, traditions, practices, they tend to stretch it not to a certain limit but in the name of public policy they try to manipulate the government and leverage the situation onto themselves for unjust benefit.

People may tend to indulge in some or the other activities which involve anti social elements, human abuse, anti – national movement which further involve in the depletion of society which reduces growth rate, decreases in per capita income due to political turmoil etc. People should be aware of such laws and politics which they should respect and live within it and also accept that fact that change is good for a democratic country. Many argue that it would tarnish their image in front of other countries but adding to it, it will create a disparity among all members of the nations as to what they should decide what is wrong or right which varies from person to person and the thought school they carry according to their traditions, customs, practices which they follow. Some people tend to channelize modern India according to western culture as they find these laws and rules more fascinating as compared to India but India is a country of diverse culture and heritage. Some special attention protection needs to be provided by mki9pp-;p-;-;-;by the government so that they can preserve them well and carry forward their culture to future generations.

References

• Dr. Avtar Singh, Law of Contract (A study of Contract Act, 1972) and specific Relief, (12th edition, 2018), EBC publishing Pvt.Ltd.
• Nilima Bhadbhade, The Indian Contract Act 1872,(14th edition 2014, Pollock and Mulla) LexisNexis
• Sir Dinshaw Fardunji Mulla, Mulla The Indian Contract Act, (15th Edn. 2016, Anirudh Wadhwa), LexisNexis 
• Articles
• Harvard Law Review, vol.13, no.4(dec,1899) pp.264-278
• The yale law journal vo. 117,no.3 (Dec 2007) pp.510-549 Journal of the Indian law institute vol 38, no.1 (Jan march 1996) pp.      83 – 89
•  Gherulal Parakh v. Mahadeodas Maiya,(1959) 2 SCR (Supp.) 406: AIR (1959)SC 781
• LORD MACNAGHTHEN Janson v. Driefontein Consolidated Mines, (1902) AC 484 at p. 499
• Scottish Union and National Insurance Co. v. Roushan Jahan (1945) 20 Luck 194:AIR 1945 Oudh 152
• Purushotamdas Tribovandas v. Purushotamdas Mangaldas, (1897)21 Bom 23.
• https://www.studocu.com/in/document/university-of-mumbai/business-law/lecture-notes/agreements-against-public-policy/2669156/view

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