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Vitiating Factors - Illegality - Coggle Diagram
Vitiating Factors - Illegality
Contracts which are illegal under statute
some types of contracts are expressly or implied illegal by legislation
Competition Act prohibits price fixing agreement and other anti-competitive practices
This will render a contract VOID
Contracts which are illegal under common law
The parties may agree to do something against the law, or for public policy reasons
Contracts to commit a crime or a tort
A contract involving a criminal offence
Contracts damaging the countries safety or its foriegn relations
contracts made with the enemy during a war are illegal
A contract is illegal if it is to perform an action in a friendly foreign state which is contrary to the law of the state
Contracts to promote corruption in public life
Corruption is illegal
Contracts to defraud HMRC
The effects of Illegality
the court will not enforce an illegal contract but in some circumstances may be prepared to allow one of the parties to recover a benefit given under an illegal contract
A claimant will not usually be prevented fro entering a claim of unjust enrichment simply because the money he seeks to recover was paid for unlawful purpose, unless the recovery of the money would be in conflict with the public interest
Contracts in Restraint of Trade
A contract which restrains free competition or movement of labour is generally regarded as against the public interest. Therefore NOT enforceable
There are exceptions if the restraint is reasonable