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.
We also provid-
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