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Chapter

Cover Cheshire, Fifoot, and Furmston's Law of Contract

11. Contracts Illegal by Statute or at Common Law  

M P Furmston

This chapter focuses on contracts prohibited by statute or contracts deemed illegal at common law on grounds of public policy, and discusses the consequences of illegality and proof of illegality.

Chapter

Cover Concentrate Questions and Answers Contract Law

9. Illegality and Restraint of Trade  

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions. Each book includes typical questions, answer plans and suggested answers, author commentary, and other features. This chapter looks at illegality and restraint of trade. Illegality is one of the most confusing areas within the law of contract, particularly as regards the consequences of a finding of illegality. This chapter considers recent developments in this general area of law as well as contracts in restraint of trade. It explores two key debates: the extent to which when faced with illegality the courts should grant relief to ensure justice, and ‘although many contracts will, to some extent, restrain future activity, the circumstances when a contract will be subject to the restraint of trade doctrine’.

Chapter

Cover Employment Law in Context

3. The Employment Relationship and the Contract of Employment  

This chapter analyses the various tests adopted by the courts and tribunals to distinguish between the contract of employment and the contract for services. It considers the history of employment, moving from a master and servant arrangement to the emergence of the ‘mutual’ or ‘reciprocal’ contract of employment. It considers the statutory concept of continuous employment, whereby an individual may be required under statute to establish a period of continuous employment on the basis of a contract of employment in order to avail him/herself of certain statutory employment protection rights. Finally, the chapter turns to the effect of an illegal contract of employment, whether it was illegal in its purpose or objective when it was formed, or expressly or implicitly prohibited by statute. There is also consideration of the illegal performance of a legal contract.

Chapter

Cover Introduction to Business Law

7. Vitiating Factors  

A contract may meet the necessary formation requirements of offer and acceptance, consideration, and intention to create legal relations, but still not be binding because it lacks other necessary factors. These invalidating factors are sometimes referred to as ‘vitiating factors’. This chapter discusses statements that constitute actionable misrepresentations; the difference between fraudulent, negligent, and innocent misrepresentation; the remedies available for each type of misrepresentation; and the effect a misrepresentation will have on the validity of a contract. The chapter considers types of mistake and when a court will regard a mistake as an operative mistake rendering the contract void. It also considers how duress and undue influence may arise, the presumptions relating to undue influence, and whether the presence of duress and undue influence will make a contract voidable. Finally, the chapter considers types of contract that are illegal under statute and under common law.

Chapter

Cover JC Smith's The Law of Contract

22. Illegality and restraint of trade  

This chapter analyses the law on illegality and restraint of trade. The law on illegality is very complicated. Illegal acts vary greatly in range and severity. The Supreme Court has recently held that a ‘range of factors’ need to be considered when deciding whether the claimant’s illegality should defeat a claim, and it is likely that the law will become increasingly flexible in this area. Restraint of trade is concerned with balancing the competing rights of private parties, notably the employer’s right to expect a certain degree of loyalty as regards their business against the employee’s freedom to leave their employment and to undertake new business activities. The key consideration tends to be whether restraint of trade clauses are reasonable.

Chapter

Cover Koffman, Macdonald & Atkins' Law of Contract

15. Illegality  

This chapter explores the illegality of contracts. Contracts which may fall within the scope of the restraint of trade doctrine are considered, including the Court of Appeal’s approach in Proactive Sports Management Ltd v Rooney. The chapter also looks at other reasons why a contract may be declared illegal or void at common law, such as grounds of public policy. Policy factors and the illegality defence are explored in light of recent case law and the Law Commission Final Report ‘The Illegality Defence’. Useful case law illustrations demonstrate how the courts have dealt with the issues surrounding illegality in a range of contexts, such as contracts to commit an unlawful act, contracts promoting sexual immorality, contracts prejudicial to the interests of the state, contracts prejudicial to the administration of justice, and contracts promoting corruption in public life. The rules on severance in light of the Supreme Court decision in Tillman v Egon Zehnder (2019) and subsequent case law are also considered. The consequences and effects of impropriety and illegality are also looked at. The landmark case of Patel v Mirza [2016] UKSC 42, and its impact on the law, is also explored in this chapter.

Chapter

Cover Contract Law

14. Protecting the public interest  

The doctrine of illegality

This chapter examines how English law deals with contracts against the public interest under the doctrine of illegality. The doctrine of illegality reflects a broader principle that applies across private law, that legal actions cannot be founded on illegal acts. In contract law, its implication is that contracts contrary to law or public policy are void. The chapter first considers the problem of illegal behaviour in contracting before discussing the rule-based approach to illegality and its limits. It then reviews the Supreme Court decision in Patel v Mirza and how it gave rise to the ‘range of factors’ approach to illegality. It also looks at criteria that make a contract illegal, including cases where the illegality consisted of criminal and civil wrongs. The chapter concludes with an overview of other types of illegality, such as the ‘injurious to good government’ ground and restraint of trade.

Chapter

Cover Poole's Textbook on Contract Law

11. Illegality  

Robert Merkin, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. This chapter examines contracts that are tainted by illegality or otherwise contrary to public policy, and how illegality affects the parties’ positions following the hugely influential Supreme Court decision of Patel v Mirza. A contract may be illegal from the beginning or illegality may arise as a result of statute (for example, express statutory prohibitions). Examples of illegal contracts are those intended to commit crimes or contracts prejudicial to sexual morality. As a general principle, illegal contracts cannot be enforced and benefits conferred in the performance of an illegal contract cannot be recovered. There are some exceptions, however, such as where the parties are not in pari delicto (not equally guilty), or where the claimant can establish his right to the money or property transferred without having to rely upon the illegal contract. This chapter also examine the law’s treatment of contracts in restraint of trade, including exclusive dealing and exclusive service agreements.

Chapter

Cover Koffman, Macdonald & Atkins' Law of Contract

19. The doctrine of frustration  

This chapter investigates the scope of the doctrine of frustration which was developed to deal with cases where events occur after a contract is made which render the agreement illegal, or impossible to perform, or which fundamentally change the nature of the obligations undertaken by the parties. The use and relevance of force majeure clauses particularly in light of Brexit and the Covid-19 pandemic is considered. The doctrine operates within strict limits and its use is restricted in cases where, although the commercial purpose of the contract has been drastically affected by unforeseen events, the performance of the contract is still possible. The position under the Law Reform (Frustrated Contracts) Act 1943 and under the common law is examined, collectively demonstrating how the doctrine currently operates.

Chapter

Cover Poole's Textbook on Contract Law

10. Duress, undue influence, and unconscionable bargains  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. This chapter examines contracts that are tainted by illegality or otherwise contrary to public policy, and how illegality affects the parties’ positions following the hugely influential Supreme Court decision of Patel v Mirza. A contract may be illegal from the beginning, or illegality may arise as a result of statute (for example, express statutory prohibitions). Examples of illegal contracts are those intended to commit crimes or contracts prejudicial to sexual morality. As a general principle, illegal contracts cannot be enforced, and benefits conferred in the performance of an illegal contract cannot be recovered. There are some exceptions, however, such as where the parties are not in pari delicto (not equally guilty), or where the claimant can establish his right to the money or property transferred without having to rely upon the illegal contract. This chapter also examine the law’s treatment of contracts in restraint of trade, including exclusive dealing and exclusive service agreements.

Chapter

Cover Poole's Textbook on Contract Law

11. Illegality  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. This chapter examines contracts that are tainted by illegality or otherwise contrary to public policy, and how illegality affects the parties’ positions following the hugely influential Supreme Court decision of Patel v Mirza. A contract may be illegal from the beginning or illegality may arise as a result of statute (for example, express statutory prohibitions). Examples of illegal contracts are those intended to commit crimes or contracts prejudicial to sexual morality. As a general principle, illegal contracts cannot be enforced and benefits conferred in the performance of an illegal contract cannot be recovered. There are some exceptions, however, such as where the parties are not in pari delicto (not equally guilty), or where the claimant can establish his right to the money or property transferred without having to rely upon the illegal contract. This chapter also examine the law’s treatment of contracts in restraint of trade, including exclusive dealing and exclusive service agreements.

Chapter

Cover Poole's Casebook on Contract Law

11. Illegality  

Robert Merkin and Séverine Saintier

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. A contract may be deemed illegal or void on grounds of public policy. This chapter examines the illegality of contracts under English law, contracts prohibited by statute (express prohibition), and contracts that are illegal in their performance. It considers contracts that are void on grounds of public policy, focusing on contracts in restraint of trade, covenants between employer and employee, exclusive dealing agreements, exclusive service agreements, and severance of the objectionable parts of covenants. The chapter also discusses the recovery of money or property transferred under an illegal contract, along with the UK Law Commission’s proposed reform of the law governing illegal contracts and the Supreme Court decision of Patel v Mirza over controversy concerning the nature of illegality, the basis for intervention in illegal contracts, and the ability to recover under an illegal contract.

Chapter

Cover Poole's Casebook on Contract Law

11. Illegality  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. A contract may be deemed illegal or void on grounds of public policy. This chapter examines the illegality of contracts under English law, contracts prohibited by statute (express prohibition), and contracts that are illegal in their performance. It considers contracts that are void on grounds of public policy, focusing on contracts in restraint of trade, covenants between employer and employee, exclusive dealing agreements, exclusive service agreements, and severance of the objectionable parts of covenants. The chapter also discusses the recovery of money or property transferred under an illegal contract, along with the UK Law Commission’s proposed reform of the law governing illegal contracts and the Supreme Court decision of Patel v Mirza over controversy concerning the nature of illegality, the basis for intervention in illegal contracts, and the ability to recover under an illegal contract.