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1. Factors Affecting Validity Of Contractsand2. Parties to the ContractSEMINAR 6Jeanette Ng[email protected]NO FORM OF ELECTRONIC RECORDING IS ALLOWED WITHOUT PRIOR PERMISSION
2RECAP of LAST WEEK – Terms (Express and Implied)Flight attendants:(a) publicly discussed certain info about the planes – eg.cabins were infested with cockroaches; the number of times engines were replaced; and(b)publicly insulted the passengers.Is it likely that there are implied terms about (a) and (b)?
FACTORS AFFECTING THE VALIDITY OF CONTRACTS3
(1) FACTORS AFFECTING CONTRACTS•Even if there is a contract and it has terms, it may still not be enforceable due to the presence of some factorssuch as: 1.Illegality,2.Misrepresentation,3.Undue Influence,4.Duress, or 5.Mistake.4Vitiating FactorsThere goes your contract!
1. ILLEGALITY 5
Overview of ILLEGALITYCase law(Against Public Policy)StatutesILLEGALITYRestraint of TradeGenerally VOID; monies transferred usually cannot be recovered.6Must protect legitimate interestReasonable in scope, duration and subject matterCovered in Seminar 5** Additional
ILLEGALITY•A contract may be illegal pursuant to:(a)case law; or(b)statute law.7
(a) Case Law - Illegality•Cases have held that, among other things, the following types of contracts are illegal/against public policy:oA contract to commit a crime,oA contract prejudicial to the administration of justice.8Contract to promote sexual immorality– finance a brothel. Ahvena RM Chitty v Lim Ah Han (1894)Contract to benefit an enemyRegazzoni v KC Sethia (1956); Wu Shun Foods Co Ltd v Ken Manufacturing (2002)Contract to give false evidence at trial R v Andrews (1973)** Additional
(b) Statute Law - Illegality•A statute could also expressly or impliedly make a contract illegal and unenforceable.•For instance, the Moneylender’s Act (Singapore)expressly states that if a moneylender is not licenced, any contract entered into by him would be unenforceable. 9Section 5, Civil Law Act(Cap. 43 of Singapore): All gaming & wagering contracts are illegal and void UNLESS….? They cannot be enforced.** Additional
10Mr Mak and his brother lent $13 mil to Mr. Loh and wife – to help them during the 1998/9 financial crisisMr. MakMr. LohMr Loh claims that it was an illegal loan, therefore, a void contract – no need to repay loan$$
11Lady Gaga claimed:•her ex-lover (also ex-producer) was not a licensed talent agent;•so, his contract with her was illegal; and•thus, he is not entitled to any payments for work done.
Effect of illegality•Once a contract is illegal pursuant to case law or statute, no rights flow from it. Thus, eg.money paid cannot be recovered and money payable need not be paid.•BUT some limited exceptionsto the above rule eg. innocence. Eg.if one of the parties to the contract is innocent, thatinnocent partymay have some rights under the contract.