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1.0 Introduction
Illegal contract
Definition: Illegal contract is a promise that is prohibited
due to its very nature. Such contracts are prohibited since
the performance, formation, or object of the
agreement is against the law.
An illegal agreement, is one that the courts will not
enforce because the purpose of the agreement is to
achieve an illegal end.
EXAMPLE: A contract for murder.
Section 10 CA 1950 provides that for an agreement to
be a contract, it must be made by the free consent of the
parties competent to the contract and the consideration
and object of the agreement must be lawful and are not
expressly declared to be VOID.
Agreements
affected by
illegality
s.24(a)
(e) CA
1950
Selaman
The Resp entered an agreement to transfer land classified as Native
Area Land in Bintawa, Kuching to the App. The App lodged a caveat in
respect of the said land and it was duly registered in the Land Registry.
Later, the Resp successfully sought an order from court to remove the
said caveat.
Held: A non-native sought to deal in native area land; and this was
against the S8 of Sarawak Land Code unless the dealing was
authorised by the Yang di-Pertua Negeri, Sarawak.
CONSEQUENCES
OF ILLEGAL
CONTRACTS
THE CONTRACT IS
UNENFORCEABLE
ANY ADVANTAGE
RECEIVED MUST
BE RESTORED OR
COMPENSATED
Case : Foo