Illegality

The topic illegality addresses the circumstances under which the subject matter of
the contract has been disproved of. This disapproval is caught up in the maximum Ex
turpi causa non (out of a base cause, no action arises) it labels contract as being
illegal. Tricky- some contraction the face of it may appear to it to have a valid
agreement but the issue is that the contract is tainted (turpitude) eg. With the
sale of a drug.
The position of the law in this area involves the characteristics of prohibition
contract both by statutes and under the common law.
✓ Statutory prohibition encompasses the orders rules and regulations made
by parliament. Such prohibition can with be expressed or implied. An express
prohibition will generally take care of itself (speaks for itself) but implied
prohibition present certain difficulties which can only be resolved by considering
the construction of the statute. The leading approach to implied prohibition has
been confirmed by case law as being purposive this is confirmed in the St. John
shipping corporation v Joseph rank Ltd, thus the question is whether the object of
the legislation was to forbid the type of contract in question.
Smith v Mawhood - Baron park-“I think the object of the legislature was not to
prohibit an object of sale by dealers who have taken out a license Persuant to the
act of parliament if it was they certainly could not recover although the
prohibition was for the purpose of revenue but looking at the act of parliament
I think it is OBJECT was not to vissiate the contract itself but only to impose a
penalty upon the party offending for the purpose of revenue.”

It was this reason that facilitated a holding that a tobacco dealer was allowed to
recover the price of tobacco delivered in state of his failure to take out a
license and to have his name painted on his place of business as he was required to
do by statute.
Similarity in the archbolds freight and Ltd case lord justice peiace concluded that
the ObJECT of the road and rail traffic act of 1933 was not to interfere with the
owner of goods or his facilities for transport but to control those who provided
the transport with the view to promoting efficiency. Transport of goods was not
made illegal but the various listener holders were prohibited from e roach on one
another’s territory the intent of the act being to provide an orderly and
comprehensive service.” The solution then is where it has been alleged that a
contract has been implidly prohibited then it clearly is important to look at the
relevance of the statue and to consider whether that policy is served by holding
that the particular contract has been impliedly prohibited. If the prohibition of
expresses the outcome appears to be more straightforward since parliaments will in
prohibiting contracts has to be respected.

What the cases have illustrated is that the disregard of a statutory prohibition
may affect the contract either in its formation or in its performance. If it is
illegal in its formation then it is rendered void ad … (from the beginning) the
consequence of this is to make the contract a complete nullity under which no
rights can be acquired by the parties irrespective of their pure intentions
conversely a contract is illegal by performance if it is performed by one of the
parties in a manner that offends the statutory requirement- Anderson Ltd v Daniel -
a staute required that every seller of artificial fertilizer should give to the
buyer an invoice stating the percentage of certain chemical substances contained in
the good the seller in this case delivered ten tons of artificial manure without
complying with the statutory requirement the sellers brought an action for the
price of the goods their claim failed why? They had not performed the contract in
the way required in the statue. The innocent party will not necessarily lose his
right to remedies provided that he was neither privy to or condoning of the illegal
conduct challenge tho? Is in trying or distance oneself from the illegal act in
the contract.
Importantly tho the statutory provisions in such circumstances have to be examined
in order to determine whether parliament’s intention was that the violation in the
way the contract was performed was intended to deprive the guilty party of all of
his remedies, transgression are sometimes worthy of forgiveness.

Fair assumption that no one knows all the law so there is a possibility that one
may enter into a contract without knowing the act was illegal.

✓ Contracts illegal at common law

This particular area of law is governed by public policy, these contract are
vissiated by some improper element which is frowned upon based on public interest.
The following 6types of contracts fall into this category
1. contract to commit a crime- a tort, a fraud on a third party.
2. Contract that is sexually immoral
3. A contract tot the prejudicial of public safety
4. A contract prejudicial to the administration of justice
5. A contract that tends to corruption in public life
6. A contract to defraud the revenue (property sold for 350000 rather that
400000)
Thus 3 others
◦ Contract to oust the court’s jurisdiction
◦ Contract that tends to pred the status of marriage
◦ A contract in restraint of strain
These contracts are deemed as less serious and thus makes the contract void as a
matter of public policy
Bennett v Bennett LJ denning said this about the latter 3
They are not illegal in the sense that a contract to do an illegal immoral act as
illegal. They are not unenforceable in TH sense that a contract within the statue
of frauds is unenforceable these covenants lie somewhere in between.”

Modern cases are lobbying to place these acts in one group.