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10. april 2021

Illegal Agreement

Technically, a contract or agreement considered illegal is not considered a contract at all and therefore a court will not enforce it. Instead, illegal contracts are considered invalid or unenforceable, i.e. as if the treaty never existed. Therefore, if one of the parties violates the contract, they have no right to remedy this situation. In this case, the specific provision of the Indian Contracts Act in question sets out in detail the objectives that could be achieved under the conclusion of a contract. These provisions are clear and detailed and have been commented on over the years by forensic experts in several precedents. However, the “Against Public Order” segment continues to create a blurring area in determining whether or not a contract is illegal. As mentioned in some cases, public order is generally interpreted as something for the common good; However, its definition changes with the circumstances. Therefore, the interpretation of this provision is not uniform and concrete. It must be based on the situation, which is sometimes largely based on opinions.

Such opinions are subjective and depend on how a particular person analyzes a particular situation. This creates an ambiguous and worrying situation for policy makers. As explained above, if it is considered illegal, the contract becomes invalid (unenforceable) and it will be as if it has never been created. As a general rule, the court will leave the parties in the state they were in at the time of the offence. None of the parties will be able to recover the losses, because the court basically says that there is no contract here. When a court finds that an agreement is unenforceable and no recourse should be granted, the assets transferred under the agreement are at the place where they are transferred. There is no reversal of property rights. The Law on Illegality stems from the exceptional decision of Lord Mansfield in Holman v Johnson (1775) which encapsulaates the maxim (in italics): back, for example, of the blackjack merchant, if his employer does not pay them for the work they did as a blackjack dealer, the trader will not have the means to recover their lost wages for the job , because the entire employment contract is illegal.