Lawful agreement

Question 1

What are two aspects of lawful agreement

Answer 1

statutory illegality and common law illegality

Question 2

What does statutory illegality mean

Answer 2

Any agreement prohibited by statute/legislation is illegal is generally void but you can have a contract that is illegal but valid

Question 3

How can you test for statutory illegality

Answer 3

You need to assess the intention:
- is the purpose of prohibition is simply to raise money for revenue
- would recognising the agreement bring about harm that the legislation tried to avoid
- would it cause greater inconvenience to void the contract than to allow it to stand
- Does it impose a criminal sanction

Question 4

What does common law illegality mean and what are the consequences

Answer 4

These are agreements which are contra Bonos mores. They are always void

Question 5

What are exceptions in common law illegality

Answer 5

“Pari delicto” where both parties acted illegally meaning neither can claim what they performed
if one party did not act illegally then they can claim back restitution