Summary
Summary contract
- Module
- Contract
- Institution
- University Of Winchester (UoW)
Summary of 14 pages for the course Contract at UoW (illegality)
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ILLEGALITYIntroduction
“It is a principle of public policy that no court will lend its aid to a man who founds
his cause of action upon an immoral or illegal act.”
Holman v Johnson (1775) 1 Cowp 341 Lord Mansfield
The Latin maxim ex turpi causa non oritur actio: ‘no action arises from a disgraceful
cause’ has long been taken as expressing the public policy that an illegal contract
cannot be enforced either directly under the law of contract or indirectly for
example using the law of torts or the law of unjust enrichment.
“The illegality doctrine relates to contracts which are illegal or contrary to public
policy (hereafter ‘illegal contracts’). Contracts may be tainted because:
● making such contracts is itself prohibited, or
● more usually because its means (the method of performance) is illegal; or
● the contract’s ends (purposes) are illegal.”
Mindy Chen-Wishart, Contract Law (5th ed OUP 2015) W2.1
Potential effect of Illegality
The contract is unenforceable:
e.g. Carlill v Carboilic Smoke Ball Co [1893] 1 QB 256 where it was argued that the
agreement was a wagering contract and therefore unenforceable.
A non-contractual remedy (e.g. tort or unjust enrichment) may also be denied if to
grant it would be to condone the illegality:
Awwad v Geraghty [2001] Q.B. 570: a contract was contrary to statute and the party
was also prevented from binging a quantum meruit claim to be paid a reasonable
sum for work done – “If the court, for reasons of public policy refuses to enforce an
agreement that a solicitor should be paid it must follow that he cannot claim on a
quantum meruit.” Schiemann LJ 596
Tinsley v Milligan [1994] 1 AC 340, a claim would be barred if the claimant had to rely
on the illegality to bring the claim. This is the so-called reliance test and is rejected
by the Supreme Court in Patel v Mirza below.
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