Legal Definitions - immoral consideration

An immoral consideration refers to a situation in contract law where the "something of value" (the consideration) exchanged between parties is based on an act or promise that is contrary to widely accepted standards of morality or public policy. When a contract involves an immoral consideration, courts generally refuse to enforce it, meaning the agreement is not legally binding. This is because the legal system will not support agreements that promote or facilitate activities deemed harmful or unethical by society.

Here are some examples:

• Example 1: Contract for an Illegal Act

  Imagine a scenario where a business owner offers to pay a hacker $10,000 to illegally access a competitor's computer systems and steal their client list. The $10,000 is the consideration offered by the business owner, and the act of hacking is the consideration offered by the hacker. However, since hacking and data theft are illegal and unethical activities, a court would deem this an immoral consideration. Consequently, the agreement would be unenforceable; neither party could sue the other to compel performance or recover damages if the agreement fell apart.

• Example 2: Contract Against Public Policy

  Consider a situation where a wealthy individual promises to donate a large sum of money to a university if the university's admissions committee guarantees their unqualified child a spot in a highly competitive program, bypassing standard merit-based procedures. The donation is the consideration, but the promise to subvert a fair and merit-based admissions process for personal gain is against public policy and widely considered unethical. A court would likely find this to be an immoral consideration, rendering the agreement unenforceable, as it undermines the integrity of the educational system.

• Example 3: Contract for Unethical or Harmful Conduct

  Suppose a landlord offers a tenant a significant reduction in rent for the next year if the tenant agrees to falsely testify in a separate legal dispute that the landlord was not negligent in maintaining the property, despite the tenant knowing otherwise. The rent reduction is the consideration offered by the landlord, and the false testimony is the consideration offered by the tenant. Providing false testimony (perjury) is illegal and deeply immoral, as it undermines the justice system. Therefore, a court would identify this as an immoral consideration and refuse to enforce the agreement, meaning the tenant could not legally demand the rent reduction even if they provided the false testimony.