Agreements contrary to public policy PDF

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Agreements contrary to public policy...

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Agreements contrary to public policy  Rationale  Here, the agreements are not illegal, but are unenforceable and void because they contravene public policy.  The rules here are mostly judge made.  The categories of common law public policy are stated to be closed, so, judges apply the rules based on its application to similar contracts.  This promotes certainty and keeps public policy claims within limits.  Categories  Contracts concerning marriage.  Contracts promoting sexual immorality.  Contracts to oust the jurisdiction of the courts.           

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Contracts concerning marriage Future separation- used to be invalid- Wilson v Wilson [1848], but are now enforceable- Macleod v Macleod [2008]; Granatino v Radmacher [2010]. Restraint of marriage- A contract which imposes liability on a person if he or she marries is void – Lowe v Peers [1768]. Marriage brokerage- Hermann v Charlesworth [1905]. Contracts promoting sexual immorality Covers both heterosexual and homosexual activities outside marriage. Such activities, though not criminal offences or civil wrongs, may be deemed immoral. The rule is not limited to contracts which directly concern sexual activity – Pearce v Brooks [1866]; Appleton v Campbell [1826]. Not every contract with sexual connotations will be treated as ‘immoral’Armhouse Lee Ltd v Chappell [1996]. Contracts to oust the jurisdiction of the courts Baker v Jones [1954]- The rules of the British Amateur Weightlifters Association which provided that the Association’s central council was to be the sole interpreter of the rules of the association and that the council’s decision was final in all circumstances was held to be contrary to public policy as it related to questions of law which the courts reserve the right to decide. Exceptions In commercial matters, parties may agree in their contract to submit disputes to arbitration and this is approved by the courts – Scott v Avery [1855] and under statute- Arbitration Act 1996. However, a party may still have recourse to the court on a point of law if specified conditions are met (Sec 69(3) Arbitration Act 1996). In a separation agreement, a clause which prevents a wife from applying to court in return for a promise of maintenance- the wife can still apply to court, but the clause is enforceable as regards the promise of the husband. Effects of contracts void at common law The consequence of a contract void for being contrary to public policy is that neither party can enforce the contract.

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If only a part of the contract is void for that reason, severance may be possible. As regards the recovery of money or property, the issue of fault does not arise in the same way as it does in illegal contracts, so, recovery will be allowed- Hermann v Charlesworth- plaintiff was allowed to recover her deposit even though the contract was void....