The types of illegality may overlap. Where an illegal employment contract has been entered into and a worker asserts a right of wrongful dismissal (which is a legal right), there are two public policy objectives at least two competitors. This includes: in order for an agreement to be considered a valid contract, it must include the free consent of the parties, as well as the assurance that the “object” of such a contract is legal. Without respect for these particular conditions, a contract cannot be considered valid in the eyes of the law. Under india`s Treaty Act, an important determinant of an illegal agreement is the “object” of the counterparty. This can be formulated as an illustration for a more precise understanding – it is not in the same sense as the consideration and is not used in the same sense. According to this connotation, if a contract has a legal and effective consideration, it will not prevent the contract of the object disputed, that is, the object of the contract is illegal and contrary to public order. To establish the illegality of a treaty, the commonly followed basic rule is: “Do the parties oppose the law by getting involved in the treaty?” If this question provides a positive answer, the treaty is illegal and unenforceable. Section 23 of the Indian Treaty has various parties to it that determine the illegality of a contract. 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. In principle, contracts are illegal when the training 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. A person involved in an illegal agreement risks losing because his or her actions are not covered by the illegal treaty. It is therefore important to get advice from a lawyer before signing a contract, and the lawyer can tell you whether the contract is illegal or not. Not all contract-related illegalities are the same. If illegality exists, the situation is different. A particular standard must be met in order for a contract to be tainted by the illegality of the common law. The Law on Illegality stems from a prominent decision of Lord Mansfield in Holman v Johnson (1775) which encapsulaates the maxim (in italics): in some cases, a part under quantenmeruit may recover the value of the goods or services concluded, even if the contract was deemed illegal. If, in itself, the services provided were not illegal and one party does not respect its part of the contract, the other party under quantenmeruit may recover for the value it received. If the offence is based on non-payment of services, an applicant should avail himself of Quantum Meruit in order to preserve the right to re-acquisition. As always in the law, there are exceptions.
Situations in which a court could authorize the recovery of a party are important: a party withdrawing from execution, a party protected by a party, a party not guilty, excusable ignorance and partial illegality. Sometimes a contract deals with an object that is not expressly prohibited by law, but is nevertheless contrary to public policy and the principles of fair trade. These contracts also fall under the category of “illegal contracts” and are not applicable.