Unlawful agreement means such agreement which is not made in accordance with law. It is made by the parties lacking of its essentials either one or more than one, such agreement is not enforceable by the court of justice and it has no legal remedy in case of breach of such agreement. If its contents illegal or prohibited object and consideration, it may be punishable by law. If it is made lacking only its essentials then it is regarded as void. There is no question of remedy and recovery. Section 13(a) to (k) of Nepal Contract Act, 2056 has provided the provisions of unlawful agreement.

There are two types of agreement in Nepal Contract Act, 2056:

(i)        Void agreement (Section 13) (ii) Voidable agreement (Section 14)

(i) Void agreement: The agreement which is illegal is void. It means no legal effect no legal remedy to the agreed party. Illegal agreement forbidden by law Section 23 of Indian Contract Act, 1872 declared void agreement that is why it is not enforceable by the court of law. According to section 13 of Nepal Contract Act, following are the void agreement.


  • Agreement in restraint of trade.
  • Agreement in restraint of marriage.
  • Agreement in restraint of public facilities.
  • Agreement in restraint of legal proceeding.
  • Agreement which unlawful object and consideration.
  • Agreement by mutual mistake.
  • Agreement to do impossible work.
  • Agreement having uncertain meaning. 
  • Agreement by incompetent party. 
  • Agreement without consideration. 
  • Agreement contingent on impossible events.