MBE Rules · Contracts
Illegality
Illegality and public policy
The rule
Contracts to perform illegal acts are void; contracts merely made illegal in purpose or by later law may be voidable or discharged by impracticability, and courts leave parties in pari delicto where they lie.
In plain English
Contracts that involve illegal activities are completely void and cannot be enforced. If a contract is made for a legal purpose but later becomes illegal or is deemed illegal in its intent, it may be voidable or discharged due to impracticability, but the courts generally do not help either party if they are equally at fault.
Worked example
Alice and Bob enter into a contract for the sale of stolen goods. Since the contract is for an illegal act, it is void and cannot be enforced. If Alice later tries to sue Bob for non-payment, the court will dismiss her claim because the contract is illegal.
Memory hook
No legality, no liability!
The trap
Exams may present scenarios where a contract is legal at the time of formation but becomes illegal later, tricking students into thinking the contract is still enforceable.
How examiners test it
Questions often involve fact patterns where a contract's legality is questioned, requiring students to analyze whether the contract is void, voidable, or enforceable based on the circumstances.
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