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Contracts - The 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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"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"
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"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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