LAWFULNESS OF A

CONTRACT
CHAPTER 7
LAWFULNESS OF • A contract must be lawful in order for it to
A CONTRACT be valid and enforceable.
• An unlawful contract or a contract to
achieve an illegal aim can never be
enforced by court.
• As a general rule, all contracts are lawful
unless prohibited by law.
• Prohibition can either be statute or by
common law.
• An agreement is prohibited by common law
if it is against good morals of the
community (contra bonos mores).
• Examples of contracts against public policy

1. Agreements to threaten the safety of the State

2. Unreasonably restraining the freedom to

marry or divorce

3. Unreasonably restricting a person's freedom of

trade
CONTRACTS
4. Agreements to defraud the public
PROHIBITED BY
5. Agreements for an immoral purpose. COMMON LAW
6. Agreement to undermine order, or interfer
with the administration of justice.

7. Gambling, betting or gaming contracts

8. An unconscionable contract.
DEVELOPMENT OF COMMON LAW
Involves one of
the following
situations:
• Unfairness in
concluding a
contract
• Unfair contracts and
contractual terms
• Unfair enforcement
of a contract
CONT....
1. Certainty of a contract

2. Freedom of contract

3. Sanctity of a contract

4. Legality of a contract

5. Good faith in contract

Current law regarding the role of public policy in enforcement of contracts:

Brendenkamp v Napier 2007 (5) SA 323 (CC)