Contract Law · defense

Elements of Illegality

Quick Answer

What are the elements of Illegality?

Illegality occurs when a contract or a course of action is rendered unenforceable by law due to it involving illegal activities or violating public policy. This principle is rooted in the idea that the law will not aid a party in claiming a right that arises from an illegal act.

Required Elements

1. Illegal Subject Matter

The contract or agreement must involve subject matter that is prohibited by law.

What to prove: It must be shown that the subject matter of the contract violates a statute or a public policy.

2. Culpability of the Parties

Both or one of the parties must have engaged in illegal actions that support the illegality claim.

What to prove: It needs to be established that the parties knowingly engaged in activities that are illegal.

3. Public Policy Concerns

The enforcement of the contract would contravene the public's interest or the integrity of the legal system.

What to prove: Evidence must show that enforcing the contract would negatively impact societal interests or violate prevalent laws.

Burden of Proof

The burden of proof typically lies with the party asserting the illegality, and the standard is a preponderance of the evidence.

Available Defenses
  • Unclean Hands
  • Lack of Culpability
Common Fact Patterns
  • A contract for the sale of illegal drugs.
  • An agreement for the performance of services that are regulated and unauthorized by law.
Exam Tip

On exams, consider analyzing each element separately, focusing on how the facts relate to established principles of illegality.

Key Cases
  • Holmes v. Smith
  • Friedman v. New York
  • Miller v. National Bank

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