Technically, a contract or agreement considered illegal is not considered a contract at all and therefore a court will not enforce it. Instead, illegal contracts are considered invalid or unenforceable, i.e. as if the treaty never existed. Therefore, if one of the parties violates the contract, they have no right to remedy this situation. After an illegal contract is concluded, you cannot take legal action to recover the losses. If you are not sure if a contract is illegal or not, you should contact a lawyer before entering into a contract. An experienced lawyer will easily be able to determine whether a contract is illegal. The article examined various principles set out in the provision, in conjunction with the case law, to determine the judicial status on illegal contracts. In addition, these provisions have been analyzed to determine their significance and application based on the situations and circumstances in which they are used. The three main principles that are illustrated in this article are essentially the guiding principles and determinants of illegal contracts and agreements in the Indian judicial system. The difference between an inconclusive agreement and an unenforceable contract can be considerable. A particular standard must be met in order for a contract to be tainted by the illegality of the common law.
The fact is that the courts are not in a position to enforce what would otherwise be enforceable rights. There are at least 3 possible results of illegal agreements. The general consequence of illegality is that the courts do not provide support to a party involved in litigation by granting recourse to a party to enable it to profit from illegal conduct. The result is generally that the contract is illegal and: In principle, contracts are illegal when the formation or execution of the contract induces the parties to participate in illegal activities. Illegality must relate directly to the content of the contract and not to another intervention. Thus, it can sometimes be difficult to prove whether a contract is illegal or not. A basic general rule is that if the contract requires one of the parties to do something that is illegal, it will generally be unenforceable. Ex turpi causa is an acronym for the full form of the legal maxim, ex turpi causa non oritur action. This means that « no shameful action should lead to action. » Serious illegality usually renders a contract invalid or unenforceable. Remedies may be unattainable for one or more parties. It depends on a number of factors, such as the seriousness of the illegality and how illegality relates to the main purpose of the treaty.
But just because it is illegally bound to the contract does not mean that a court will deprive a party or all parties of any recourse.