🤔
Contracts • Defenses to Enforcement and Formation
K#066
Legal Definition
If the subject matter of a contract is legal, then the agreement is enforceable if the plaintiff did not have reason to know of the defendant's illegal purpose, but voidable by the unknowledgeable party.
Plain English Explanation
Sometimes people need help from others in order to commit a crime, but the help isn't necessarily illegal. For example, if someone hires a delivery company to deliver a box, and that box contains a gun that the person intends on using in a murder, the subject matter of the agreement is the delivery of a box, which is perfectly legal even though the purpose is to ultimately commit a crime.
Hypothetical
Hypo 1: Bob has been watching Breaking Bad on Netflix and decides he wants to try to cook some meth. After a few hours of Google searches, Bob realizes he will need quite a lot of Sudafed and some barrels. Bob tells Sam "I'll pay you $100 if you buy me 5 packs of Sudafed." Sam agrees. Bob tells Amy, "I'll pay you $100 if you buy me 2 large barrels." Amy agrees. Sam buys the Sudafed and Amy buys the barrels. Sam runs into Amy heading to Bob's house. At this point, Amy realizes what's going on and says, "Damn it, looks like Bob is trying to cook meth." Sam says, "What? Is that what he's up to?" Sam decides he no longer wants to give Bob the Sudafed. Amy decides to still bring Bob the barrels. Result: Normally, Sam would be in breach of contract for not performing what he promised (bringing Bob Sudafed). However, when he became aware that it was going to be used for an illegal purpose, he has the right to void the contract. Thus, he can return the Sudafed and get his money back instead of giving it to Bob in exchange for $100. In contrast, Amy's decision to proceed with the contract and get paid $100 is no longer enforceable because she has become aware of its illegal purpose. Had she been ignorant to the purpose, then it would have remained enforceable.
Visual Aids
Related Concepts
What are the 12 defenses to enforcement and formation?
What are the 4 methods of satisfying the Statute of Frauds?
What are the requirements for a judicial admission to satisfy the Statute of Frauds?
What are the requirements for performance to satisfy the Statute of Frauds in a sale of ordinary goods?
What are the requirements for performance to satisfy the Statute of Frauds in a sale of specially manufactured goods?
What are the requirements for performance to satisfy the Statute of Frauds in a service contract?
What are the requirements for performance to satisfy the Statute of Frauds in a transfer of real estate?
What constitutes a service contract not capable of performance within a year?
What constitutes a valid transfer of interest in real estate?
What constitutes lack of capacity?
What is a merchant's confirmatory memo?
What is a person without capacity legally obligated to pay for?
What is a suretyship contract?
What is the effect of ambiguous words in an agreement?
What is the effect of a mutual mistake of fact on the formation of a contract?
What is the effect of a unilateral mistake of fact on the formation of a contract?
What is the effect of duress on the formation of a contract?
What is the effect of misrepresentation on the formation of a contract?
What is the effect of non-disclosure on the formation of a contract?
"What is the effect of provisions in contracts requiring written modifications?"
What is the effect on an agreement if its subject matter or consideration being illegal?
What is the result of a covenant not to compete that lacks reasonable need or time and place limits?
What is the result of an exculpatory agreement that exempts intentional or reckless conduct from liability?
What is the Statute of Frauds?
What is unconscionability and its effect on the formation of a contract?
What is undue influence and its effect on the formation of a contract?
What rights does a contracting minor have upon reaching the age of majority?
What types of contracts fall within the Statute of Frauds?
