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.
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Chapter
11. Contracts Illegal by Statute or at Common Law
M P Furmston
Chapter
11. Illegality
Jack Beatson, Andrew Burrows, and John Cartwright
This chapter considers what counts as illegality and the effect of illegality on a contract (and consequent restitution). The approach of the Courts to illegality has been transformed for the better, and simplified, by the Supreme Court in Patel v Mirza in 2016. Illegal conduct, tainting a contract, can vary widely from serious crimes (eg murder) to relatively minor crimes (eg breach of licensing requirements) through to civil wrongs and to conduct that does not comprise a wrong but is contrary to public policy. As regards the effect of illegality, where a statute does not deal with this, the common law approach is now to apply a range of factors. A final section of the chapter examines contracts in restraint of trade.
Chapter
12. Derogations and Justifications
This chapter examines the express powers given to the Member States by Union law to prevent or restrict migrants from enjoying in full the rights enjoyed by workers, the self-employed, providers/receivers of services, and of citizens in the host state. The express derogations laid down by the Treaty fall into two categories: general derogations (public policy, public security, and public health); and specific derogations (employment in the public service). It also examines the exceptions found in the Citizens’ Rights Directive 2004/38.
Chapter
11. Absolute grounds for refusal of registration
This chapter examines the absolute grounds for refusal of trade marks from registrability, which are found in s. 3 of the Trade Marks Act 1994 (TMA). The chapter lists objections to registrability based on the mark's own characteristics. To be refused registration, the mark should possess some innate quality which prevents registration. For instance, the mark applied for may be descriptive, generic, or it may lack distinctiveness. Marks that go against public policy or marks that are immoral will also be refused protection. The TMA also contains a number of negative objections in contrast to its predecessor, which required an applicant to show that the mark applied for was positively entitled to registration.
Chapter
7. Charity: trust creation and public policy II
This chapter explores how the creation of trusts is influenced by special considerations of public policy, focusing on charity that is beneficial to the public as opposed to illegality. Charity will render a purpose trust valid that the law of trusts would otherwise consider to be void. In contrast, illegality will sometimes render an interest or transaction void or unenforceable that the law of trusts and gifts would generally consider to be valid. After considering the creation of charitable trusts, the chapter also discusses charitable purposes and the public benefit as well as the administration of charitable trusts, before concluding by analysing their variation in accordance with the ‘cy-près’ doctrine.
Chapter
X. Public policy
This chapter argues that relevant evidence must be excluded on the ground of public policy on certain conditions. It explores two of these conditions: when the evidence concerns certain matters of public interest considered to be more important than the full disclosure of facts to the court, and when it relates to miscellaneous matters connected with litigation. The chapter also discusses evidence that has been illegally obtained, though this topic is not usually covered under the umbrella of public policy. Although there is no comparably strict general exclusionary rule, it is increasingly the case that the courts recognize the existence of an exclusionary discretion. This is governed in part by weighing the public interest in the conviction of guilty criminals against the public interest in the preservation of basic civil liberties.
Chapter
8. Policy limits
This chapter describes some policy limits in the law of equity. The rule against perpetuities prevents owners tying their property up outside of the market for too long a period, otherwise known as the ‘perpetuity period’. The rules of perpetuity also account for accumulations and inalienability. Meanwhile, conditional and determinable interests, where the conditions are designed to influence the beneficiaries’ behaviour in a way that is contrary to public policy, are also restricted. Legislation also provides that trusts may be set aside if they are established with the object of defrauding the creditors of the settlor.
Chapter
26. Subject Matter: The Requirement that there be a Design
L. Bently, B. Sherman, D. Gangjee, and P. Johnson
This chapter considers the requirements for a design to be protected, with particular reference to the requirement that there be a design. It begins by outlining the requirements for validity before turning to the definition of ‘design’ with respect to registered designs in the UK as well as unregistered designs, citing three key elements of this definition: appearance, features, and product. It also examines three types of design that are excluded from the very broad definition of design: designs dictated solely by technical function; designs for products that must be produced in a specific way to enable them to connect to another product; and designs that are contrary to morality or public policy.
Chapter
7. Charity: trust creation and public policy II
This chapter explores how the creation of trusts is influenced by special considerations of public policy, focusing on charity that is beneficial to the public as opposed to illegality. Charity will render a purpose trust valid that the law of trusts would otherwise consider to be void. In contrast, illegality will sometimes render an interest or transaction void or unenforceable that the law of trusts and gifts would generally consider to be valid. After considering the creation of charitable trusts, the chapter also discusses charitable purposes and the public benefit as well as the administration of charitable trusts, before concluding by analysing their variation in accordance with the ‘cy-près’ doctrine.
Chapter
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
3. Consent
This chapter deals with consent as a necessary precondition for medical treatment of competent adults. It provides an overview of the common law basis of the Mental Capacity Act 2005, followed by discussion of issues relating to information disclosure, public policy, and the key case of Montgomery and how this applies to more recent cases. It considers the statutory provisions for adults who lack capacity, exceptions to the requirement to treat patients who lack capacity in their best interests, and consent involving children under the Children Act 1989. Gillick competence, a concept applied to determine whether a child may give consent, is also explained. Relevant case law, including Gillick, which gave rise to the concept, are cited where appropriate.
Chapter
13. Public Criminology:
Theory and Policy
This chapter examines the implications of theories of crime and deviance for public policy and practice. It first considers why criminologists devote few of their resources to political activity in general and the making of public policy in particular, with emphasis on the issues of role-definition, translatability, and salience. It then turns to some theoretical perspectives about the relationship between deviance and social policy, focusing on the work of the Chicago School of Sociology as well as functionalist theories, anomie theory, and the projects that put forward a theory based on a detailed analysis of the links between crime, delinquency, and social structure. It also looks at the work of Thomas Mathiesen in the field of a critical criminological penal reform project that advocates abolitionism. The chapter concludes with a discussion of public criminology.
Chapter
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
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.
Book
Cheshire, Fifoot & Furmston’s Law of Contract is a classic text on contract law. The first edition was published over seventy years ago. The book combines an account of the principles of the law of contract with analysis and insights, and the narrative brings understanding of complex contractual issues to a wider readership. It starts by providing a historic introduction, and goes on to look at issues such as modern contract law, agreement, consideration, and legal relations. The book details the contents of the contract and looks at unenforceable contracts, mistake, misrepresentation, duress, and undue influence. Chapters then examine contracts rendered void under statute, contracts illegal by statute or at common law, and contracts void at common law due to public policy. The text moves on to look at privity, rights and liabilities, performance and breach, and discharge under the doctrine of frustration. Finally, the book looks at remedies for breach of contract.
Chapter
5. Article 101 TFEU: Substantive Appraisal
This chapter examines the relationship between Article 101(1) and Article 101(3). It looks at the central question of which agreements, decisions and concerted practices have as their object or effect the prevention, restriction or distortion of competition for the purposes of Article 101(1) and at the issue of which agreements are held to infringe Article 101(1) but meet the critera for exemption from the prohibition set out in Article 101(3). The chapter looks at the way in which the interpretation of ‘object or effect the prevention, restriction or distortion of competition’ has changed since the early days of EEC competition law and at the problems of identifying which agreements are restrictive by object and which restrictive by effect. It examines the recent and controversial case law on this matter and the difficulties which remain including the doctrine of ancillary restraints. It then focuses on the analysis of the effect of agreements which are not restrictive by object, including the concept of appreciability and the de minimis notice. The chapter then considers the matter of which restrictive agreements may neverthess escape the prohibition in Article 101(1) because they meet the criteria in Article 101(3) in that they improve the production or distribution of goods or the promotion of technical or economic progress, how this criterion is distinguished from the agreement not having restrictive effects that bring it within Article 101(1) in the first place, and whether the Article 101(3) criteria can encompass socio-political or public policy matters. The chapter considers the application of the Article 101(3) criteria, the shifting of the burden of proof between Article 101(1) and 101(3), and the existence and importance of block exemptions.
Chapter
6. Public policy limitations on the formation of trusts
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. If a person sets up a trust to protect himself from creditors in case of insolvency, the trust will be void. Public policy does not permit private trusts to defeat public interests. In addition to a trust prejudicing one’s creditors, other examples of trusts that are void on grounds of public policy are trusts that promote racial or sexual prejudice, trusts which tie up wealth for too long, trusts that restrain marriage and ‘sham’ trusts. This chapter, which focuses on public policy limitations on the formation of trusts, first outlines the rules against perpetuities, the rule against remoteness of vesting, the rule against inalienability of capital and the rules against perpetuity and charities. It then considers private trusts, a breach of the rules against perpetuity and excessive accumulation of income, situations in which a trust designed to shield assets from creditors will and will not be void, the Perpetuities and Accumulations Act 1964, proposals for reform of the rules against perpetuities and gifts subject to conditions.
Chapter
37. Absolute Grounds for Refusal
L. Bently, B. Sherman, D. Gangjee, and P. Johnson
This chapter examines the ‘absolute’ grounds for refusing to register a trade mark as set out in section 3 of the Trade Marks Act 1994. It first looks at the reasons for denying an application for trade mark registration before analysing the absolute grounds for refusal, which can be grouped into three general categories: whether the sign falls within the statutory definition of a trade mark found in sections 1(1) and 3(1)(a) and (2) of the Trade Marks Act 1994; whether trade marks are non-distinctive, descriptive, and generic; and whether trade marks are contrary to public policy or morality, likely to deceive the public, or prohibited by law, or if the application was made in bad faith. Provisions for specially protected emblems are also considered.
Chapter
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
6. Formality, perpetuity, and illegality: trust creation and public policy I
Trust property apparently belongs to the person who is not the true owner despite having all the forms and powers of ownership. Thus, a trust creates an illusion of ownership that may prejudice trade creditors when the trustee becomes insolvent and deceive the state’s tax collection agencies. However, there are a number of safeguards designed to prevent the undesirable creation and operation of trusts. For example, the disposition of equitable interests under trusts must be made in writing and the creation of trusts of land must be evidenced in writing. This chapter discusses the ways in which the creation of trusts is influenced by special considerations of public policy, focusing on formality, perpetuity, and illegality. It also considers rules against perpetuities—the rule against remoteness of vesting, the rule against inalienability of capital, and the rule against accumulation of income—and finally, looks at the Perpetuities and Accumulations Act 2009.
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