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5.4.1 Illegality Lecture – Introduction

Welcome to the fifth lesson of this module guide – illegality! This is the last of the core vitiating factors key to contract law. There are two types to be aware of; statutory illegality and common law illegality. The consequence of either of these types of illegality can be varied, therefore the consequences for a contract that is found to be illegal must be understood.

The chapter begins with a discussion of the statutory prohibition of contracts, including express and implied prohibitions. The relevant case law is examined as well as the effect of statutory penalties. The chapter then moves on to consider the different types of common law prohibitions; public policy and restraint of trade. Finally, the effects and recovery are discussed.

Below are some goals and objectives for you to refer to after learning this section.

Goals for this section

  • To understand the difference between statutory and common law prohibitions
  • To understand the consequences of either of these types of illegality
  • To understand what illegality is in terms of contract

Objectives for this section

  • To be able to differentiate between statutory and common law illegality
  • To be able to define the concept of illegality
  • To understand and be able to apply the case law in this area
  • To understand the effects of illegality
  • To understand how recovery under illegal contracts works
  • To understand the ‘blue pencil’ test and how to apply it
  • To be able to determine whether a contract is reasonable

Start the Lecture

We have three lengths of lecture to suit varying study needs. Select one of the options below to get started (if you have already chosen a study level you will see the option highlighted in violet):

Summary Notes Standard Lecture Detailed Lecture

Problem Questions

Each lecture is also accompanied by hands on examples of problem questions for the subject. You can jump directly to the questions below:

Hands on Examples


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