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CIVIL LAW

Illegal Contracts Act 1970

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Know the law on illegal contracts   .  .  .   protect you investments   .  .  .  don't take unecessary risks  .  .  .  your contract could be unenforceable.

We set out below :

  • A summary of the principles
  • A direct link to the full Act
  • Some useful tips

If a Court finds that a contract is illegal then it has wide powers to declare it invalid and therefore unenforceable or,   in the just and fair case,   to award damages or enforce part of it.

Some contracts have no effect because they are not sufficiently certain  (they are not effective contracts).  

Certain contracts cannot be enforced unless they are in writing. 

Other contracts may be unenforceable because they have been the subject of duress or are grossly unconscionable or unfair.   See our specialist topics entitled : 

Contracts and Contract Law

Contracts - Do They Have To Be In Writing?

Contracts - Do they have to be Fair?

Illegal Contracts are in a different category.

For many years,  our Courts have been prepared to declare invalid and unenforceable any contract which breaches the law of the land or which has been considered to be contrary to public policy.    The rules built up by our Courts on this topic are known as common law rules.

In New Zealand,  the position is now governed by the Illegal Contracts Act 1970 and it is therefore important to go directly to that Act first and read it carefully.  It is a short Act and can be accessed through the direct link below. 

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Feedback/Blogs/Reviews from related topic: Advertising - False and Misleading
"Membership No 186685
I have been unable to acquire any case law in regards to bankruptcy. I am thge alleged defendant in the matter and have opposed the application for bankruptcy as I am not the defendant. The case is now at the stage of the high court requiring a synopsis under 251a, I wish to make submissions in not being notified of the hearing at the district court after the notice of proceeding was served. The matter then got judgement without my knowledge and is now before the high court for bankruptcy. Please advise the procedure to locate any supportive case law that may assist with my application to set aside the bankrupcy claim.

Kindest Regards
A.Marsh
I "

"You will certainly get a rehearing if you were not notified but, if you simply misread the documents you were originally served with then you could be in trouble. You must actively follow up on your obligation to file and serve a defence and not just wait for the Court to come to you. Good luck . . . Netlaw "
"Likewise . . . very helpful. Thanks. Gerald - May 2007 - Tauranga"
"Received notice from a creditors lawyer that they wish to put in companiy into liquidation and I have up to today upon receiving their letter. A Statory Demand was intially sent on 7 Aril 2008, which I reponded with a reply explaining that an arrangement (verbal) had been entered in by both parties which was to continue supply, once company got post dated cheques, company stopped surpply and but still continued to present cheques which was not the agreement which was entred into.
What position does that leave me if I want to legal challenge this. Without causing me excessive expresses.

Rina

Netlaw responds: If you say that they cannot properly sue because there was a new agreement for time payment, then you can apply for an injunction saying that the Statutory Demand Notice is wrong. But it will cost you. An injunction should not be done without legal advice. Type up a Statement setting out precisiely all the facts as you know them and see a lawyer as soon as possible. A letter shouid be sent to the other side saying how inappropriate the Demand procedure is when the subsequent agreement between the parties was made and kept by you. But you must get your facts right!"

Feedback/Blogs/Reviews from related topic: Advertising - False and Misleading
"Helpful, but I would like some more fact scenarios to assit me in my decision . . . but it was the best site I found because it ties all relevant sites together. Not too many fancy words. Wheelbarrow and corrugated iron are about my limits. Well done! John D. - Hamilton June 2007"
Feedback/Blogs/Reviews from related topic: Advertising - False and Misleading
"I found all these contract topics interesting and helpful. JD. Napier December 2006"
Feedback/Blogs/Reviews from related topic: Advertising - False and Misleading
"I found this interesting. I want to sue for punitive damages and I was interested to learn that our courts are pretty conservative. I think the Welfare have quite wrongly taken my kids and I have found out that the affidavit they gave to a Judge to get an order to uplift them was known to the Welfare to be incorrect. They told the Judge that I had drug convictions but when I found out 5 months ago that they thought that I proved then to them that this was untrue yet I have now found that they have still put this false evidence in an affidavit. But they have also told other people about my "drug convictions". You have to watch these people. (name witheld) - May 2007"
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