Flashcards
Contract Law- Illegality
Cards in this deck (8)
- 1Les Laboratoires Servier v Apotex Inc Lord Sumption:Illegality bars the application of the authority of the state to the enforcement of an illegal transaction or to the determination of the legal consequences of an illegal act.
Illegality applies at either contract formation or contract performance - 2Contract FormationAgreement or undertaking is void from the time of formation due to illegality
- 3Contract PerformanceAgreement satisy the requirements for formation of contract but are unenforceable due to illegality or Public Policy.
- 4Reasons for tthe illegality doctrine* Preservation of the integrity and dignity of the legal system
* Promotion of consistency in the legal system
* Prevention of a tainted justice administration system
* the Court cannot be used to aid parties that have participated in prohibited activities - 5Sources of IllegalityStatute: this is through express or implied prohibition; Bigos v Bousted (agreement contrary to exchange regulations held unenforceable)
Common law: Public policy is used to decline enforcement of agreements contrary to good morals, agreements to commit crimes, agreements in restraint of trade etc. Pearce v Brooks (agreement to supply goods to a prostitute for prostitution held unenforceable) - 6Approaches to illegalityStrict - mechanical
Flexible - Purposive/discretionary - 7Strict Approach to illegalitymeans that illegality is a procedural bar that prevents even the evaluation of the underlyin public policy.
Tinsley v Milligan;
"the effect of the illegality is not substantive but procedural". - 8Flexible Approach to Illegalitymeans that an illegality defence will fail if it is not justified by reference to the underlying public policies.
The supreme Court recently confirmed the flexible approach: Patel v Mirza; claimant paid D 620,000 pounds to illegally trade in a bank´s shares as prohibited by insider dealing law. Performance of the agreement required certain information to be disclosed. the information was not disclosed and to the illegal trade was not carried out. the court held that the claimant should recover the money he had paid to D.
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- Law Flashcards on Contract Law- Illegality, created by Vanja Juvet on 29/04/2018.
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- Vanja Juvet
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