The Indian Contract Act of 1872 is the primary law governing contracts in India. The act lays down the principles of contract formation, performance, and termination. It also defines the circumstances under which an agreement is considered illegal and unenforceable by law.

An illegal agreement is defined as one that violates a legal provision, public policy, or morality. Such agreements are not enforceable by law, and any party to the agreement cannot claim any remedy or relief in a court of law.

There are several types of illegal agreements under the Indian Contract Act. The first category of illegal agreements is those that contravene a specific legal provision. For example, an agreement to sell a stolen vehicle is an illegal agreement as it is a violation of the Indian Penal Code.

The second category of illegal agreements is those that are against public policy. Public policy refers to those policies that are beneficial to the general public or society at large. Agreements that promote activities like gambling, prostitution, or smuggling are considered against public policy and therefore illegal.

The third category of illegal agreements is those that are immoral or unethical. For example, an agreement that requires a person to do something that is illegal or immoral is considered an illegal agreement.

The Indian Contract Act also provides for certain agreements to be void from the outset. These include agreements that are fraudulent, agreements that are impossible to perform, and agreements that involve undue influence or coercion.

A contract that is illegal and unenforceable cannot be ratified, which means that no party to the agreement can waive its illegality and enforce it. Any agreement that violates public policy, morality, or legal provisions is considered void ab initio, meaning it is void from the beginning.

In conclusion, it is essential for parties to a contract to ensure that the agreement is legal and enforceable before entering into it. Any agreement that is illegal is not only unenforceable but also exposes the parties to legal penalties and other consequences. Therefore, it is advisable to seek legal advice before entering into any contract to ensure that the terms are legal and enforceable.