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Cheung Pik Wan v Tong Sau Ping HKLR 921; Stott, p. 73Facts:The plaintiff was illiterate and did not speak Cantonese. She was the owner of a flat. Thedefendant persuaded the plaintiff to give him the title deeds to the flat and to sign a powerof attorney. The plaintiff thought that she was signing a guarantee for the return of the titledeeds. The defendant transferred the flat to X.Held:The plaintiff, being illiterate, had been deceived and had not been negligent in executingthe power of attorney. Both the power of attorney and the assignment were void.Remedies for MistakeSince mistakes such as those described above make a contract void, any money or property shouldbe returned to the original owners. Property which has passed on to a third party may be recovered.84
E.ILLEGALITYThe following contracts are illegal at common law – usually because they are recognized as beingmorally wrong:-•contracts to commit a crime or a tort;•contracts that are sexually immoral-Lee Hoi Ping v Chan Suen alias Chan Sin HKLR95•contracts that corrupt public life (e.g. bribery);•contracts of trade with an enemy in wartime; and•contracts which are prejudicial to the administration of justice-Richarvey Ltd v. Victor Fung HKLR 797Results of Illegality at Common lawIf a contract is illegal at common law, it will bevoid. The court will not assist in recovering goods,property or money.Remedies for Illegality at Common lawFor a contract with an illegal purpose, there is no remedy. The courts will not assist either party inrecovering property and money. The contract is effectively unenforceable.2.Contracts Illegal by StatuteContracts to carry out activities that are prohibited by an ordinance are contracts that are illegal bystatute. They may be divided into contracts where the purpose of the activities is illegal or wherethe activity is carried out in an illegal way.Yim Wai-tsang v Lee Yuk-har HKLR 1Johnson Stokes & Master v. Boucher 1 HKLR 219Results of Illegality by StatuteSometimes, the ordinance specifies the consequences of the illegality - e.g. it may state that theresulting contract is unenforceable or void. If the ordinance does not specify the consequences, thecourt will have to decide whether or not to enforce the contract.Remedies for Illegality by StatuteIf the contract is declared void or unenforceable, the parties will not be able to recover goods,property or money.3.Contracts contrary to Public policyIf a contract involves conduct that is not actually illegal but is undesirable, it will be described ascontrary to public policy. These contracts are void.These include:-contracts to oust the jurisdiction of the court;contracts prejudicial to the state of marriage; andcontracts in restraint of trade.\MAJID\AF 2504 T486