GREGORY ABRAMS DAVIDSON SOLICITORS
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The law provides a framework in which contracts can operate.
Parties must perform within the terms of the contract as a failure to do so will result in a breach.
However, when a contract involves illegality, matters are dealt with differently.
For the law to uphold illegal contracts would be contrary to the integrity of the legal system to help those who engage in criminal conduct.
Contracts with regard to certain types of subject matter are prohibited. For example, buying and selling organs online.
Contracts are illegal because they commit wrongs, whether that be criminal or civil.
Illegality is not confined to these areas as it also includes a range of other matters of public policy.
There are several sources of illegality:
The subject matter of the agreement must relate to an illegal purpose that violates the law.
The principle of illegality is often raised in an action for breach of contract, as a possible defence.
The usual laws surrounding contracts tend to not apply.
As a general rule – “Ex turpi cause non oritur actio”, no action arises from a base (or disreputable) cause, but this is not always the case.
Judicial remedies can be withheld because of the illegality of the contract.
The consequences will not always be a denial of remedy.
The courts approach illegality in a multifactorial approach (Patel v Mirza [2016] UKSC 42) by weighing three matters.
Their main focus to explore is whether there may be inconsistency damaging to the integrity of the legal system. (Stoffel v Grondona [2020] UKSC 42).
They must:
What would be the impact to leave things as they stand rather than granting the relief sought by the claimant?
Taking into account any other relevant public policies which may be rendered ineffective or less effective by the denial of the claim. (Hounga v Allen [2014] UKSC 47)
Whether denial of relied will be proportionate to the nature and degree of the illegality involved. In some cases illegality may be such a tenuous connection that it is disproportionate to hold the entire transaction to be unenforceable.
Gregory Abrams Davidson Solicitors specialise in commercial and corporate law, including illegality of contracts.
We have been advising clients on contractual issues such as illegality for over 40 years. We have helped our clients navigate their way through difficult and onerous contractual situations.
Should you require any assistance with such matters, please contact us to discuss in confidence on a no obligation basis.
Please call 0151 236 5000, email us at [email protected] or fill out the online enquiry form below.
Liverpool City Centre: 20/24 Mathew Street, Liverpool L2 6RE
Liverpool – Penny Lane: 123 Penny Lane, Liverpool, L18 1DF
London – North West: 746 Finchley Road, Temple Fortune, Golders Green, London, NW11 7TH
Whilst our solicitors are based in one location, we are always happy to try to make an appointment to meet you in any of our office locations, if this is more convenient for you.
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Gregory Abrams Davidson Solicitors and GAD Commercial are trading names of National Law Partners Limited, registered in England and Wales under number 08312439 and are Authorised and Regulated by the Solicitors Regulation Authority, under number 646548. Gregory Abrams Davidson Solicitors registered office: 20-24 Mathew Street, Liverpool, L2 6RE. VAT Registration Number: 290 6677 68.