essentials of a valid contract 2-Agreement should be legal,Ex turpi causa and pari delictum rule

Summary

This video tutorial explains the essential elements of a valid contract, including agreement, legality, capacity, and performance. It emphasizes that contracts must not be unlawful, either under statutory or common law, with examples of contracts deemed illegal such as those involving human trafficking or unreasonable restraints of trade. The video also discusses the 'ex turpi causa' and 'pari delicto' principles, which dictate that illegal contracts are unenforceable, though there are exceptions in cases of fraud or unjust enrichment. The tutorial provides case studies to illustrate these legal concepts in action.

Takeaways

• 😀 A valid contract requires an agreement between the parties involved.
• 😀 A contract must be legal, and if it's prohibited by state law, it is considered unlawful and void.
• 😀 Contracts that violate statutory laws, such as those involving illegal goods or activities, are not enforceable.
• 😀 Agreements that go against public policy or morality, such as marriage brokerage or unreasonable trade restraints, are void.
• 😀 Contracts must be performed in a way that is legally permissible. If performance is impossible, the contract is void.
• 😀 Serious intention to contract is necessary—there must be no pretense or fakeness in the agreement.
• 😀 Contracts that involve illegal activities, such as human trafficking or selling illicit goods, are automatically void.
• 😀 The **Ex Trupo Causa** rule means that an illegal contract cannot be enforced by the law under any circumstances.
• 😀 **In Pari Delicto** rule implies that if both parties are equally guilty of entering into an illegal contract, they bear the loss.
• 😀 Legal exceptions to the **In Pari Delicto** rule exist, such as in cases of fraud, misrepresentation, or unjust enrichment.
• 😀 Cases like **Judgement v. Kasim** and **Libby's v. Pada** show how courts handle illegal contracts, sometimes relaxing rules to prevent unjust outcomes.

Q & A

What are the essential elements for a valid contract?

The essential elements for a valid contract include: agreement, legality, contractual capacity, necessary formalities, possible performance, serious intention to contract, and the agreement must not be fake.

Why must an agreement be lawful for a contract to be valid?

An agreement must be lawful because a contract cannot come into existence if it is unlawful, either through explicit or implied prohibition by state law, such as engaging in illegal activities or violating public policy.

What is the difference between express and implied prohibitions in contracts?

Express prohibitions occur when a statute clearly forbids an act, while implied prohibitions arise when a statute doesn't directly forbid an act but imposes a penalty for performing it, indicating it is unlawful.

Can you give examples of contracts that are prohibited by statutes?

Examples include the sale of illegal goods (such as drugs or wild animals), agreements that involve working for wages below the minimum wage, and contracts made for illegal activities like human trafficking.

What is meant by an agreement being contrary to public policy?

An agreement is contrary to public policy if it opposes the interest of the state, justice, or the general public, making it void. Examples include contracts related to crime, unreasonable trade restraints, or price-fixing.

What is the effect of an agreement to terminate a marriage in exchange for money?

Such agreements are considered void. For example, in the case of Ifa Harris, an agreement to pay someone to divorce their spouse and marry another person was found to be unlawful.

What is the legal outcome of an agreement to procure a marriage for payment?

An agreement to pay someone to introduce a suitable suitor and arrange a marriage is void. This was demonstrated in the case of Year Taylor, where a marriage brokerage agreement was held to be unenforceable.

How does common law view contracts that restrict trade or employment?

Common law views such contracts as void if they unreasonably restrain a person's ability to trade or work. For instance, a contract that restricts someone from working in a similar business for an excessive period and geographical area can be considered void.

What is the meaning of the rule 'Ex turpi causa non oritur actio' in contract law?

'Ex turpi causa non oritur actio' means that no action arises from a base cause. In other words, a contract that is based on illegal activities will be unenforceable, and the law will not assist in enforcing it.

What is the 'pari delicto' rule in contract law, and are there any exceptions?

The 'pari delicto' rule means that in cases where both parties are equally guilty of illegality, the loss falls where it falls, and neither party can claim damages. Exceptions to this rule include cases involving fraud, misrepresentation, or unjust enrichment.