Sometimes it is statute which causes a contract to be illegal. This was the
case in Re Mahmoud and Ispahani (above). On other occasions a contract
is illegal because of common law. This was so in the following case.
A contract that is definitely illegal will be void. A contract which is not
actually illegal, but prejudicial to the state, preventing the administration of
justice, promoting sexual immorality, defrauding the revenue or promoting
corruption in public life will not be legally binding and therefore
unenforceable in court.
Contracts which are not actually illegal may be allowed to stand but are
held to be unenforceable, such as wagering agreements, contracts
prejudicial to marriage, and those in restraint of trade.
Restraint of trade
Illegality 201Anderson v Daniel (1924)
The labelling on a consignment of manure did not conform to legal
requirements for this type of manure. There was nothing illegal in
general in forming a contract to supply this manure, but it became illegal
in the way in which the manure was delivered with the wrong labelling.Everet v Williams (1725)
An agreement was formed between two highwaymen to rob a coach and
share the swag. After the robbery one went away with all the proceeds,
and the other sued. The contract was (predictably) held to be illegal.Parkinson v College of Ambulance (1925)
Here an agreement was made to obtain a knighthood in exchange for a
generous donation to charity. This is not actually criminal but is not in
the interests of society, given the nature of a knighthood and of
donations to charity.I hereby agree not to work
when I leave this
employment, even if I don’t
have any money for the
rest of my life...