What does not constitute legal purpose in a contract?

The nature of legal purpose in a contract refers to the requirement that the subject matter of the contract must be lawful. In the context of insurance, a contract must cover risks that are legal and do not violate public policy. Insurance for illegal activities fails this requirement, as engaging in or protecting against illegal activities is not recognized by law. As a result, contracts that involve insurance against illegal acts are void and unenforceable, as they do not serve a lawful purpose.

In contrast, insurance against theft, life, and natural disasters are all considered legal purposes because they deal with risks that can occur in a legal and legitimate context. These types of insurance contracts provide financial protection against losses that are recognized and accepted by law, affirming their status within the framework of lawful contracts.