Illegality Flashcards
(12 cards)
What is the legal effect of a contract that is void for illegality?
A. It is void ab initio, with no legal effect from the start
B. It is voidable at the election of either party
C. It remains valid but unenforceable until the statute is repealed
D. It may be enforced if both parties consent afterwards
A. It is void ab initio, with no legal effect from the start.
Explanation: An illegal contract is treated as if it never existed; neither party can enforce rights under it
Which of the following is not a category of illegal contracts?
A. Contracts to commit a crime or tort
B. Contracts contrary to a statutory prohibition
C. Contracts entered into under economic duress
D. Contracts against public policy (e.g., maintenance, champerty)
C. Contracts entered into under economic duress.
Explanation: Economic duress vitiates consent but does not by itself make a contract illegal on public policy grounds
Which doctrine prevents a court from assisting a claimant whose cause of action arises from their own illegal act?
A. Contra proferentem
B. In pari delicto
C. Ex turpi causa non oritur actio
D. Quantum meruit
C. Ex turpi causa non oritur actio.
Explanation: The “illegality principle” bars a plaintiff from recovering for a claim founded upon their own illegal act
Which case established that equity may provide relief even when strict illegality would bar a claim?
A. Patel v Mirza
B. Holman v Johnson
C. Gray v Thames Trains
D. Tinsley v Milligan
D. Tinsley v Milligan.
Explanation: In Tinsley v Milligan, the House of Lords allowed a claimant to enforce a property trust interest despite an illegal underlying purpose, to avoid disproportionate denial of rights
Anna and Ben agree to share the proceeds of a robbery. Anna later sues Ben for her share. What is the result?
A. No contract exists; it’s void for illegality
B. Contract is voidable at Anna’s option
C. Contract is enforceable under equity
D. Anna can recover on quantum meruit
A. No contract exists; it’s void for illegality.
Explanation: Agreements to commit a crime are illegal and void ab initio
Claire contracts to sell restricted wildlife without a licence, contrary to statute. Is the contract enforceable?
A. Yes, if Claire later obtains the licence
B. No, it is void for statutory illegality
C. Yes, if the buyer paid full price
D. No, unless the court grants relief in equity
B. No, it is void for statutory illegality.
Explanation: Contracts that breach a statutory prohibition are void and unenforceable
David bets heavily on football matches, knowing the wager is illegal. He loses and sues to recover his loss. What happens?
A. He may recover if he can show duress
B. He may recover if the bookmaker misrepresented odds
C. He cannot recover; wagering contracts are illegal
D. He can recover under the Contract (Rights of Third Parties) Act
C. He cannot recover; wagering contracts are illegal.
Explanation: Wagering contracts are illegal at common law and unenforceable
Eve pays Frank for a counterfeit Rolex, later discovered fake. Frank refuses refund. Can Eve enforce the contract?
A. Yes, because the watch was delivered
B. No, because the contract’s object was illegal
C. Yes, if Eve kept quiet about the illegality
D. No, unless the payment was under duress
B. No, because the contract’s object was illegal.
Explanation: Contracts to buy or sell counterfeit goods are illegal and void, barring enforcement
What does the doctrine of “in pari delicto” dictate?
A. Both parties at equal fault cannot seek equitable relief
B. Only the less guilty party may enforce the contract
C. Parties equally at fault share damages equally
D. Faulty parties may recover under quantum meruit
A. Both parties at equal fault cannot seek equitable relief.
Explanation: In pari delicto means “in equal fault”; courts refuse to assist any plaintiff whose claim arises from their own illegal act
Under Patel v Mirza (affirming Tinsley v Milligan), which approach do courts use for illegality?
A. Automatic forfeiture of all rights
B. Balancing public interest and proportionality before refusing relief
C. Always refuse to consider any equitable claim
D. Apply a strict rule-based test ignoring substance
B. Balancing public interest and proportionality before refusing relief.
Explanation: Patel v Mirza endorses a policy-based approach, weighing the seriousness of illegality against the injustice of denying relief
Which of these is not an effect of illegality?
A. The contract is void and treated as if never existed
B. Parties cannot recover benefits under the contract
C. Courts may award punitive damages against the innocent party
D. No remedy is available at common law
C. Courts may award punitive damages against the innocent party.
Explanation: Illegality bars recovery; punitive damages are never awarded to an illegal claimant
What standard must be met for a contract to be illegal on public policy grounds?
A. The contract must involve violence
B. The contract must breach human rights statutes
C. The contract must not only offend morals but harm the public interest
D. The contract must involve financial loss to the state
C. The contract must not only offend morals but harm the public interest.
Explanation: Public-policy illegality attaches where enforcement would be harmful to the public good, not merely because it offends some moral standard
