Kuwait Court of Cassation principle number 364

Summary: - Cause of the obligation. Contracting must rest upon a cause, and that cause must be lawful. Failure thereof. Effect thereof. Nullity of the contract for lack of one of its essential elements. Article 176/1, Civil Code. - Cause of the obligation. It includes the inducing motive if it was contemplated in the contract, in that the other contracting party knew of it or was presumed to know of it, and the existence and lawfulness of that cause are considered at the time the contract is concluded. It is not confined to the direct purpose which the contracting party seeks to achieve by agreeing to assume the obligation. Article 176/2, Civil Code. Rule: The provision in Article (176) of the Civil Code that “1- A contract is void if a contracting party undertakes an obligation without cause or for an unlawful cause, and in determining cause, regard shall be had to the inducing motive that prompts the contracting party to contract if the other contracting party knows of it or ought to have known of it.” Its import is that the legislature requires the contracting party’s obligation to rest upon a cause and that such cause be lawful; otherwise, the contract lacks one of the essential elements upon which it must be founded and is void. The legislature does not confine the cause of the obligation to the first direct purpose which the contracting party seeks to achieve by agreeing to assume the obligation; rather, it also includes the inducing motive if it was contemplated in the contract, in that the other contracting party knew of it or was presumed to know of it. The existence and lawfulness of that cause are considered at the time the contract is concluded.