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Illegality, Illegality at Common Law, intentions and knowledge of…
Illegality
statutes expressly
prohibits contract
illegal contract = unenforceable
Statutes Impliedly
prohibits contract
legislatic intention is not clear
from the plain wording of
the relevant provision
need to discern if the
provision impliedly prohibits
the contract
statute does not
expressly or impliedly
prohibit the contract
contract is enforceable if
the statute imposes a penalty
and does not deprive the parties
from contractual rights
Illegality at
Common Law
Contracts prejudicial to
administration of justice
contracts stifle prosecution
or give false evidence
Contracts deceive public
authorities
contracts to oust
jurisdiction
of the courts
contract or agreement deprives
a party of the right to seek
the redress of the courts
contracts to commit (or involving)
a crime, tort or fraud
Contracts prejudicial to public safety
Contract promoting sexual immorality
contracts liable to corrupt public life
intentions and knowledge
of parties
contract is unenforceable by both parties
if they enter with the intention of
contravening a statute
if only one party has intention or knowlege
guilty party will not be able to enforce the contract.
The party that had no knowledge was unaware and did not participate in illegality
Consequences
Restitution
Recovery of benefits conferred
under illegal contracts
Not Pari Delicto
Recovery where parties
are not equally at fault
Oppression
by one party on another, by means
of using rights to exploit others
Class Protecting Statute
statute protects one group
of people against another
Timely Repudiation
or Repentence
when one party repudiates in time
Either party can repent while
the contract is still executory
illegal purpose would
not have been carried out
there has to be genuine repentance
it has to be voluntary
Recovery when plaintiff
does not rely on the illegal
contract
plaintiff relies on a basis
that is separate and independent of
the illegality
tort
collateral contract
no action will arise
from a wrong done