chapter  10
Illegality
Pages 31

A contract which, on its face, has all the necessary characteristics of a valid, enforceable agreement, may be struck down on the ground that some statutory provision renders it illegal, or that it is tainted with a degree of moral turpitude that, on public policy grounds, renders it void and unenforceable at common law. Apart from the element of deterrence, perhaps the main reason for the courts’ refusal to entertain claims founded on illegal or immoral behaviour is that the dignity of the court would be undermined if it were seen to be encouraging or condoning reprehensible acts. The twin pillars of the law relating to illegal contracts are the Latin maxims, ‘ ex turpi causa non oritur actio’ (‘no action can be founded on an illegal act’) and ‘ in pari delicto, potior est conditio defendentis’ (‘where the parties are equally at fault, the defendant’s position is the stronger’). The combined effect of these maxims, subject to certain exceptions, is that (i) an illegal contract cannot be enforced in a court of law, and (ii) where the parties are equally at fault, any property which has been handed over to a party to an illegal contract cannot be recovered by order of a court of law.