BSP1702 - Seminar 6 - Vitiating Factors n Parties.pdf - 1 Factors Affecting Validity Of Contracts and 2 Parties to the Contract SEMINAR 6 Jeanette Ng

BSP1702 - Seminar 6 - Vitiating Factors n Parties.pdf - 1...

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1. Factors Affecting Validity Of Contracts and 2. Parties to the Contract SEMINAR 6 Jeanette Ng [email protected] NO FORM OF ELECTRONIC RECORDING IS ALLOWED WITHOUT PRIOR PERMISSION
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2 RECAP 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)?
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FACTORS AFFECTING THE VALIDITY OF CONTRACTS 3
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(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 factors such as: 1. Illegality , 2. Misrepresentation , 3. Undue Influence , 4. Duress , or 5. Mistake. 4 Vitiating Factors There goes your contract!
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1. ILLEGALITY 5
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Overview of ILLEGALITY Case law (Against Public Policy) Statutes ILLEGALITY Restraint of Trade Generally VOID ; monies transferred usually cannot be recovered. 6 Must protect legitimate interest Reasonable in scope, duration and subject matter Covered in Seminar 5 ** Additional
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ILLEGALITY A contract may be illegal pursuant to: (a) case law; or (b) statute law. 7
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(a) Case Law - Illegality Cases have held that, among other things, the following types of contracts are illegal/against public policy: o A contract to commit a crime, o A contract prejudicial to the administration of justice. 8 Contract to promote sexual immorality – finance a brothel. Ahvena RM Chitty v Lim Ah Han (1894) Contract to benefit an enemy Regazzoni 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
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(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. 9 Section 5, Civil Law Act (Cap. 43 of Singapore): All gaming & wagering contracts are illegal and void UNLESS….? They cannot be enforced. ** Additional
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10 Mr Mak and his brother lent $13 mil to Mr. Loh and wife – to help them during the 1998/9 financial crisis Mr. Mak Mr. Loh Mr Loh claims that it was an illegal loan , therefore, a void contract – no need to repay loan $$
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11 Lady 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.
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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 exceptions to the above rule eg. innocence . Eg. if one of the parties to the contract is innocent , that innocent party may have some rights under the contract .
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