An illegal agreement under the common law
of contract, is one that the court will not enforce because the purpose of the agreement is to achieve an illegal end. The illegal end must result from performance of the contract itself. The classic example of such an agreement is a contract for murder
The illegality of a contract depends on (1) the law of the country governing the contract, and (2) the law of the place of performance. Different rules will apply depending on the law of the relevant country(ies).
However, a contract that requires only legal performance on the part of each party, such as the sale of packs of cards
to a known gambler, where gambling
is illegal, will nonetheless be enforceable. A contract directly linked to the gambling
act itself, such as paying off gambling debts (see
In law and insurance, a proximate cause is an event sufficiently related to an injury that the courts deem the event to be the cause of that injury. There are two types of causation in the law: cause-in-fact, and proximate (or legal) cause. ...
), however, will not meet the legal standards of enforceability. Therefore, an employment contract between a
Blackjack (formerly Black Jack and Vingt-Un) is a casino banking game. The most widely played casino banking game in the world, it uses decks of 52 cards and descends from a global family of casino banking games known as Twenty-One. This fam ... dealer
Dealer may refer to:
Film and TV
* ''Dealers'' (film), a 1989 British film
* ''Dealers'' (TV series), a reality television series where five art and antique dealers bid on items
* ''The Dealer'' (film), filmed in 2008 and released in 2010
A speakeasy, also called a blind pig or blind tiger, is an illicit establishment that sells alcoholic beverages, or a retro style bar that replicates aspects of historical speakeasies.
Speakeasy bars came into prominence in the United States d ...
manager, is an example of an illegal agreement and the employee has no valid claim to his anticipated wages if gambling is illegal under that jurisdiction
In '' Bovard v. American Horse Enterprises
[''Bovard v. American Horse Enterprises'']
201 Cal. App. 3d 832, 247 Cal. Rptr. 340
the California Court of Appeal for the Third District
refused to enforce a contract for payment of
A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
s used for the purchase of a company that manufactured drug paraphernalia. Although the items sold were not actually illegal, the court refused to enforce the contract for
Public policy is an institutionalized proposal or a decided set of elements like laws, regulations, guidelines, and actions to solve or address relevant and real-world problems, guided by a conception and often implemented by programs. Public ...
, one cited case of lack of enforceability based on illegality is ''Royal Bank of Canada v. Newell'' (1997 NSCA 196), in which a woman forged her husband's signature on 40
A cheque, or check (American English; see spelling differences) is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The per ...
s, totalling over $58,000. To protect her from prosecution, her husband signed a letter of intent prepared by the bank in which he agreed to assume "all liability and responsibility" for the forged cheques. However, the agreement was
An unenforceable contract or transaction is one that is valid but one the court will not enforce. Unenforceable is usually used in contradiction to void (or ''void ab initio'') and voidable. If the parties perform the agreement, it will be vali ...
, and was struck down by the courts, because of its essential goal, which was to "stifle a criminal prosecution". Because of the contract's illegality, and as a result voided status, the bank was forced to return the payments made by the husband.
restraint of trade
Restraints of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. It is a precursor of modern competition law. In an old leading case of '' Mitchel v Reynolds'' (1711) Lord ...
are a variety of illegal contracts and generally will not be enforced unless they are reasonable in the interests of the contracting parties and the
Contracts in restraint of trade if proved to be reasonable can be enforced. When restraint is placed on an ex-employee, the court will consider the geographical limits, what the employee knows and the extent of the duration. Restraint imposed on a vendor of business must be reasonable and is binding if there is a genuine seal of goodwill. Under common law, contracts to fix prices
are legal. ''Sole supplier'' ("solus") agreements are legal if reasonable. Contracts which contravene public policy are void.
In pari delicto
''In pari delicto (potior/melior est conditio possidentis)'', Latin for "in equal fault (better is the condition of the possessor)", is a legal term used to refer to two persons or entities who are equally at fault, whether the malfeasance in qu ...
Nemo auditur propriam turpitudinem allegans
''Nemo auditur propriam turpitudinem allegans'' is a civil law maxim which may be translated into English as "no one can be heard to invoke his own turpitude" or "no one shall be heard, who invokes his own guilt". The maxim operated with another ...