Illegality does not necessarily mean that a criminal offence is involved. It means that the contract cannot be enforced by reason of being contrary to the public good or does not promote the public good. It is contrary to public policy. A contract may be declared illegal by an Act of parliament or court of law. An illegal contract is unenforceable.
Examples of illegal contracts
- A contrast to pay wages or salary in kind is illegal by virtue of the provisions of the Employment Act.
- A contract to commit a crime tort or fraud (Bigos V. Boostead).
- A contract prejudicial to public safety e.g. trading with alien enemies.
- A contract prejudicial to the administration of justice e.g. champerty or maintenance