15. Illegality

Abstract

This chapter explores the illegality of contracts. Contracts which may fall within the scope of the restraint of trade doctrine are considered, including the Court of Appeal’s approach in Proactive Sports Management Ltd v Rooney. The chapter also looks at other reasons why a contract may be declared illegal or void at common law, such as grounds of public policy. Policy factors and the illegality defence are explored in light of recent case law and the Law Commission Final Report ‘The Illegality Defence’. Useful case law illustrations demonstrate how the courts have dealt with the issues surrounding illegality in a range of contexts, such as contracts to commit an unlawful act, contracts promoting sexual immorality, contracts prejudicial to the interests of the state, contracts prejudicial to the administration of justice, and contracts promoting corruption in public life. The rules on severance in light of the Supreme Court decision in Tillman v Egon Zehnder (2019) and subsequent case law are also considered. The consequences and effects of impropriety and illegality are also looked at. The landmark case of Patel v Mirza [2016] UKSC 42, and its impact on the law, is also explored in this chapter.