THE LEGAL EFFECT OF ILLEGALITY OF A CONTRACT
Journal Title: Educational Research International - Year 2018, Vol 7, Issue 1
Abstract
An illegal contract is one expressly prohibited by a specific statute or at common law and the law would not only render it void but may visit its maker with sanctions such as imprisonment or forfeiture. The court will not enforce an illegal contract provided the illegality is brought to its notice. Contracts illegal by statute include: the express prohibition of certain types of contracts, the regulation of a particular trade, profession or the dealings in a particular commodity or resource, the protection of a class of a persons, the public or the promotion of an object of public policy and the raising of revenue. Contract illegal at common law are so declared because they are prejudicial to public policy, moral and economic interest of the society. Examples of such contracts include a contract to commit a crime, tort or fraud, contract prejudicial to the status of marriage, contract prejudicial to the public safety, contract prejudicial to the administration of justice, contracts tending to injure public service and contracts to defraud the revenue. The general rule is that an illegal contract is not enforceable in court. However, there are exceptions which come under the following heads: Where parties are not in pari delicto, grounds independent of illegality and where there is a fiduciary relationship. Other grounds include locus penitential, that is where the plaintiff repents before the contract is performed and where the statute is to protect one class of persons. By and large, the classification of contracts based on the legal effect is of two categories, void contracts which can be enforced by the court depending on the circumstances and illegal contracts which cannot be enforced by the court but which making could be visited with sanctions.
Authors and Affiliations
Catherine Hembadoon Abo
Keywords
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