Illegality Flashcards
(5 cards)
What is the traditional approach to illegality in contract law (prior to 2016)?
The general rule was that a contract to perform an illegal act or one contrary to public policy was declared void and unenforceable.
How has the approach to illegality changed following Patel v Mirza [2016]
The Supreme Court rejected the rigid rule and adopted a discretionary approach based on public policy and proportionality.
What overarching policy question did the court set out in Patel v Mirza?
Whether allowing recovery for something illegal would cause inconsistency and disharmony in the law and thereby damage the integrity of the legal system.
What are the ‘trio of necessary conditions’ outlined in Patel v Mirza for assessing illegality?
(a) Consider the underlying purpose of the prohibition breached and whether denying the claim would enhance that purpose.
(b) Consider any other relevant public policy that might be impacted by denying the claim.
(c) Consider whether denial of the claim would be proportionate, bearing in mind that punishment is for criminal courts, not civil courts.
How does this approach differ from the traditional one?
The new approach focuses on achieving a just and proportionate outcome in light of policy considerations, rather than applying an automatic bar on enforcement of illegal contracts.
