Illegal, invalid and void contracts

Question 1

Mcdermott notes that there are two types of illegal contract:

Answer 1

Those that are illegal in the pure sense of that word and those that are merely void

Question 2

illegality at common law categories

Answer 2

• contracts to commit a tort or a crime
• contracts of sexual immorality
• contracts encouraging immorality
• contracts prejudicial to the administration of justice
• contracts to defraud the revenue commissioners
• contracts to corrupt public officials
  contracts detrimental to natural security

Question 3

what are some examples of contracts to commit a tort or a crime?

Answer 3

such contracts include:

• To publish defamatory material knowing it to be defamatory
• To commit a physical assault on a third party
• to obtain goods by false pretences and to disseminate obscene prints

Question 4

s.120 of the succession Act 1965

Answer 4

A person is not permitted to benefit from their wrong. thus a person who has been convicted of murder or manslaughter will not be permitted to recover under the will of the deceased.

Question 5

example cases of Contracts to a crime or tort

Answer 5

Everet v. Williams - The contract to share the spoils of robbery was void
Allen v. Rescous - agreement to commit an assault was unenforceable

Question 6

what are mcdermott comments on contracts of sexual immorality ?

Answer 6

McDermott comments that the law in relation to this area is “heavily influenced” by Christian doctrine which held all forms of sexual activity other than heterosexual conduct within a monogamous marriage to be sinful.

• Sexual immorality in this context simply means sexual
  intercourse that takes place outside the confines of marriage.
• McDermott further comments that this is an area which what is acceptable to society has clearly changed rapidly and contracts which were regarded quite recently as being offensive may now be perfectly acceptable

Question 7

what are the facts of Pearce v Brooks? - Sexual Immorality

Answer 7

The owner of a carriage let it to a prostitute knowing that she intended to use it for her the purposes of her trade. The carriage was returned with some damage done to it. The owner’s action failed: The contract was unobjectionable in itself but was illegal insofar as it knowingly facilitated the immoral conduct of the prostitute.

Question 8

define maintenance

Answer 8

Maintenance has been defined by lord denning MR in an english case as the improper stirring up of litigation and strife by giving aid to one party to bring or defend a claim without just cause or excuse.

Question 9

what is the difference between maintenance and champerty?

Answer 9

• If a third party lends assistance to a litigant in circumstances which are viewed as improper, he is guilty of the crime of maintenance.
• If there is a further agreement that the person who gives aid shall receive a share of the proceeds of the action that is called champerty

The Irish courts have adopted the view that champerty is a more severe or heinous version of maintenance.

Question 10

what are the facts of the case fraser v Buckle

Answer 10

The case concerned a “heir-locator” firm which specialised in looking out for persons who die intestate, locating the persons entitled to their estate, and selling that information to prospective beneficiaries in return for a share in the state.

costello J noted that these agreements are not allowed as they affect the administration of justice, given that they pose a danger to inflate damages, suppress evidence and witnesses

Question 11

Statutory illegality meaning

Answer 11

Statutory illegality refers to the situation where a contract is made or performed in a way that breaches a legislative provision. A wide variety of contracts are made illegal by statute, either expressly or by implication.

Question 12

explain the facts of the case Hussein v. The Labour Court & Anor

Answer 12

The employee worked without a permit in very poor conditions- effectively slave labour. His ward was overturned in the HC as it was held that the employment contract was void.

Question 13

implied illegality

Answer 13

where the statue is silent on the issue, the courts will look at the purpose of the statue to determine whether the Oireachtas had such an intention

Question 14

when a contract is found to be illegal, whether at common law or under statue, the consequences result depends on which two possible situations to deal with?

Answer 14

1. contracts illegal from inception

2. contracts illegal in performance

Question 15

Contracts illegal from inception

Answer 15

That is the situation where illegality exists from the very outset and is inherent to the contract. In this situation neither party will be able to enforce the contract. the contract is deemed Void ab initio

Question 16

what are the facts of the case of Archbold v Spangletts ?

Answer 16

The def. Transported whiskey without a license. He sought to avoid liability for stolen cargo based on illegality- rejected as the purpose This was a contract of carriage not a contract to use an incorrectly licensed vehicle. The contract could have been performed using any vehicle. Therefore, the contract of carriage itself was not illegal

Question 17

contracts illegal in performance

Answer 17

In this case, the party who intends to do so will not be able to sue on the contract, and the other party may or may not be able to do so depending on the extent of his knowledge of the illegality.
If the other party is in fact ignorant of the element of illegality, then he will be able to enforce the contract.

Question 18

what is the doctrine of Ex Turpi Causa

Answer 18

a claimant will be unable to benefit through the courts for a legal action should it arise from their own illegal act.

Question 19

what are the facts of Whitecross Potatoes v. Coyle

Answer 19

agreement to export potatoes to UK, was going to do so via NI to avoid restrictions. Def. argued that the contract was void as it was their agreement to do it via smuggling. The evidence showed that the pl believed it would be legal. Therefore, did not lose their rights

Question 20

what are the facts of Ashmore v Dawson?

Answer 20

The defendant intended to use illegal vehicles and the plaintiffs has knowledge of the statutory regime and therefore both parties knew of illegality, This contract was therefore void

Question 21

what are some factors that the supreme court considered in Quinn v IBRC when determining statutory illegality?

Answer 21

1. Whether legislation expressly states that such contracts are void or illegal
2. where it is silent you look to public policy and whether it requires the contract to be struck down.

Question 22

in looking to public policy, what factors should be addressed?

Answer 22

a. whether the contract is designed to carry out the very act the legislation prevents
b. whether the wording of the statue implies that the remedies or consequences are sufficient to meet this end.
c. whether the policy of legislation is designed to apply equally to both parties or substantially or whether it is directed at only one party.
d. Whether the voidness or unenforceability would be contrary to the statue’s intentions

Question 23

Void contracts

Answer 23

These are where the contract is void on public policy grounds. Here, the Ct will attempt to sever the void part of the contract to save the rest

Question 24

what is the difference between illegal and void contracts?

Answer 24

severance will generally be available in the case of void contracts, but it is not available in the case of illegal contracts. The rationale is that illegal contracts taint or infect the entire contract, so much so that no part of the contract can be saved.

Question 25

what are the three kind of contracts that fall into the area of void contracts?

Answer 25

• agreements to oust the jurisdiction of the courts
• contracts which subvert the sanctity of marriage
  contracts in restraint of trade

Question 26

what are the facts of Beresford v royal insurance company? - contracts facilitating the commission of a crime or tort or allowing a wrongdoer to benefit from his wrong?

Answer 26

Major Rowlandson took out five life insurance policies on his own life with the defendants, Royal Insurance Co Ltd, amounting to £50,000.

Each policy contained the condition: “If one of the lives assured shall die by his own hand, whether sane or insane within one year from the commencement of the assurance, the policy shall be except void”. The plaintiff committed suicide.

Their Lordships refused to allow the administratrix to claim the insurance on the grounds of public policy even though the contract was lawful.