Lecture Notes on Illegality and Public Policy

Introduction

• Discussion on illegal public policy.
• Reference to a case: Humans and Coffee, Supreme Court of Ghana Law Report 1996-97, page 596.
• Focus on duress and undue influence.

Case Study: Humans and Coffee

• 68-year-old engineer detained by police due to creditor complaints.
• Police coercion led to the sale of his house to pay debts.
• The engineer contested the sale as being under duress.
• Supreme Court explained duress in contracts and its implications.
  • Duress involves threats that are illegitimate.
  • Consent must be genuine and not under pressure.

Illegality and Public Policy

• Introduction to concepts of illegality and public policy in contracts.
• An illegal contract cannot be enforced, even if other contractual elements are present.
• Exceptions are made when public interest is at stake.

Contracts Illegal at Common Law

1. Contracts to Commit Crimes or Wrongs:
   • Contracts involving criminal acts are illegal.
   • Example cases: Alexander and Rayson, Foster and Driscoll.
2. Contracts Promoting Sexual Immorality:
   • Contracts that endorse or encourage sexual immorality are void.
   • Example case: Pearce and Brooks.
3. Contracts Promoting Corruption:
   • Illegal contracts include those encouraging corruption in public life.
   • Example case: Parkinson's Case.
4. Contracts Prejudicial to Justice Administration:
   • Contracts obstructing justice are illegal.
   • Example cases: R v. Andrews, R v. Kearns.
5. Contracts Against State Interests:
   • Contracts that harm state interests or violate international regulations are void.
   • Example case: Ragazzoni v. KC Sethia.

Consequences of Illegality

• Illegal contracts are generally void from inception.
• Exceptions where recovery may occur:
  • Parties not in pari delicto (not equally at fault).
  • Contract withdrawal before substantial performance.

Case Study: City & Country Waste Limited v. AMA

• Contract deemed illegal due to non-compliance with statutory provisions.
• Supreme Court emphasized that unjust enrichment must be avoided.
• Adoption of a structured discretionary approach.

Contracts Void at Common Law

1. Ousting Court Jurisdiction:
   • Contracts limiting court jurisdiction are void.
   • Example case: Baker v. Jones.
2. Contracts Prejudicial to Marriage:
   • Contracts affecting marriage status are void.
   • Example case: Hermann v. Charlesworth.
3. Restraint of Trade Contracts:
   • Contracts limiting one's ability to trade or work are void unless reasonable.
   • Example case: Nordenfelt v. Maxim Nordenfelt Guns.

Restraint of Trade

• Contracts should not unduly limit one's ability to earn a living.
• Restraints must protect legitimate interests and be reasonable.
• Example of employment contract restraints discussed.

Conclusion

• Illegality and public policy are crucial in determining contract enforceability.
• Contracts must align with legal standards and public interest to be valid.