Contracts against Public Policy
There are certain types of contracts which the courts will not enforce on public policy grounds, notwithstanding that they do not involve illegality in the sense of being criminal or a breach of civil obligations. What might offend public policy may change over time.
The non-enforcement of contracts on public policy grounds involves value judgments by the court in relation to matters and circumstances which are not specifically unlawful by statute. A criticism might be made that it involves judges in making decisions on public policy grounds.
The circumstances in which contracts are invalidated on public policy grounds fall into a number of relatively well-established categories. It appears likely that the courts may extend the current categories.
Possibility of Further Grounds
The categories of contract which are void on public policy grounds at common law are relatively well established. Many of the leading cases in the area are quite old. They may require to be re-evaluated in modern circumstances. It is not wholly clear whether the courts may expand the category of contracts which may be void, as being against public policy.
The courts are likely to be slow to expand the categories of contracts which are void on the grounds of public policy, to any significant extent. Formally, the judges are not law makers. It is the legislators’ function to decide and implement public policy. In opening up potential new grounds of public policy, the full implications may not be readily apparent. There may be undesirable consequences, which are not anticipated by the judge.
On one view, the courts must develop the common law in accordance with changed circumstances. On this basis, the existing heads of public policy may be expanded within limits, while not creating wholly new grounds.
Bribery and Corruption
Further examples of contracts which are invalid at common law include those which attempt to corrupt public officials and those which encourage immorality.
Agreements which interfere with the administration of government or public policy will generally be void and may be unlawful. Bribes and corrupt agreements are unlawful and constitute the crime of corruption.
Agreements to bribe officials are obviously unlawful. Agreements to transfer monies or asset under some colourable pretence are also likely to be criminal under the Prevention of Corruption legislation and be unenforceable.
Interference with International Relations
Contracts which may damage relations with a foreign state are unlawful and unenforceable. Contracts which are contrary to the laws of a foreign state will not usually be enforced if they are unlawful in accordance with the law of the place where they are to be performed. If, however, the contract is to be performed in the State and is lawful in the jurisdiction, then it will be enforced.
Contracts, contrary to the interests of the State are not enforceable. Trading with the enemy in a time of war is illegal. Contracts that jeopardise the international relations of the state are unenforceable. There is a modern EU based provision for the enforcement of sanctions against State which are subject to sanctions or equivalent provisions.
Sexual Immorality I
Many of the older cases in this area may not be followed in a contemporary setting. General concepts of morality, particularly in the field of sexual conduct, have changed significantly in the last 50 years.
Contracts tending to undermine morality were invalid at common law. Contracts in consideration of sexual favours or an agreement for sexual services is unenforceable. A contract to procure the employment of a prostitute is unenforceable.
Modern cases suggest that judges should not impose their standards of morality in a civil dispute, even in relation to matters of which, the majority of the population would disapprove. The conduct must be significantly out of keeping with public mores before public policy would require that the contract be invalidated.
Formerly, agreements which supported or formed the basis of non-marital cohabitation were void. Cohabitation agreements are now promoted by the 2010 legislation.
Sexual Immorality II
There are common law crimes of outraging public decency, conspiring to corrupt public morals and holding an obscene indecent or grossly offensive exhibition. Contracts relating to these activities are likely to be invalid.
Contracts and incidental arrangements involving sexual immorality may be unenforceable. In a famous case relating to a contract for the hire of a carriage by a prostitute, the charge could not be enforced by the hiring company, as it was aware of the intended use.
Agreements which tend to promote adultery or perceived sexual immorality were void at common law. Contracts to provide sexual intercourse outside marriage were invalid.
An agreement by which a person might agree to cohabit and be a person’s constant companion may be against public policy. Where sexual services are part of the contract, it is likely to be void. It may be capable of being severed from the rest of the agreement.
Agreements for money or other consideration in return for sexual acts are invalid. Many activities associated with prostitution are criminalised. Prostitution in itself is not criminalised.
The above types of contract are unlawful at common Law. There are following types of contracts are deemed void.
- contracts to Oust the Jurisdiction of Courts
- contracts subverting marriage
- contracts in restrain to trade
They have less serious consequences than those in the above categories. Generally, the contracts are void rather than unlawful or illegal.
There is less support in modern cases for the distinction between void and illegal contracts. In many cases, the consequences are very similar. Void contracts are treated less severely. It is arguable that the principle of severance is available only in respect of void contracts.
Contracts Subverting Marriage
Marriage is based on the consent of the parties, so in this sense, resembles a contract. However, most of the incidents and consequences of marriage are laid down by law and it is not possible to vary them.
Contracts to marry were formerly legally enforceable. Agreements for marriage/engagement agreements are now unenforceable since the Family Law Act 1981.
Contracts which undermine or weaken marriage ties may be void at common law. Contracts which restrain marriage are generally void. A contract not to marry any other except the other party is invalid at common law. Contracts to subvert marriage are void.
Contracts by which parties make a profit from marriage may be void. Marriage brokerage contracts are generally void. Marriage brokerage contracts are void as because of the risk of abuse of power, inappropriate incentives and the promotion of unsuitable marriages.
Restraint of Marriage
Contracts restraining a person from getting married are generally void. These principles raise questions in the context of prenuptial agreements. They were formerly viewed as likely to jeopardise marriage. However, this is less likely nowadays.
An agreement may not be invalid if it does not unreasonably restrain marriage. It may, for example, be valid if it is for a period, or is limited to a particular group or area. The enforceability of these contracts is questionable and has not been fully tested at common law.
Contracts which have the effect of acting as a disincentive to marriage are not invalid in themselves if there is some other legitimate interest which is thereby served.
Cohabitation / Pre-Nuptial Agreements
Cohabitation agreements were once contrary to public policy as they subverted marriage. However, agreements regulating cohabitation are now likely to be enforced at least in some respects, given cultural and legislative changes. 2010 legislation allows for cohabitation agreements and judicial relief on the termination of some such arrangements.
The status of pre-nuptial agreements is unclear in Irish law. Many aspects are unlikely to be enforced. Contracts which contemplate future separation are invalid at common law. An agreement providing for separation, before any marriage breakdown, were held to undermine the existing marriage and were void at common law.
Certain such agreements are likely to remain contrary to public policy, as tending to destabilise marriage. Succession and family legislation contemplate certain matters which might be provided for by pre-nuptial and pre-divorce / separation agreements.
If a marriage has already broken down, separation agreements have long since been accepted as valid at common law.
References and Sources
Irish Textbooks and Casebooks
Clark, R. Contract Law in Ireland 8th Ed. (2016) Ch. 14, 15
Friel, R. The Law of Contract 2nd Ed, (2000)
McDermott, P. Contract Law (2001) 2nd Ed (2017) Ch. 15
Enright, M. Principles of Irish Contract Law (2007)
Clark and Clarke Contract Cases and Materials 4th Ed (2008)
English Textbooks and Casebooks
Poole, J. Casebook on contract law. (2014) 12th edition
Stone and Devenney, The Modern Law of Contract 10th Ed (2015)
McKendrick, Contract Law 10th Ed (2013)
Chen-Wishart, Contract Law 5th Ed (2015)
Anson, Reynell, Beatson, J., Burrows, Cartwright, Anson’s law of contract. 29th Ed (2010)
Atiyah and Smith, Atiyah’s introduction to the law of contract. 6th Ed.
Chen-Wishart, M. (2015) Contract law. 5th Ed.
Cheshire, Fifoot and Furmstons, Furmstons and Fifoot Cheshire, Fifoot and Furmston’s law of contract. OUP.
Duxbury, Robert (2011) Contract law. 2nd Ed.
Halson, Roger (2012) Contract law. 2nd Ed.
Koffman & Macdonald’s Law of Contract. 8th Ed. (2014)
O’Sullivan, Hilliard, The law of contract. 6th Ed. (2014)
Peel, and Treitel, The law of contract. 13th Ed. (2011).
Poole, J.Casebook on contract law. 12th Ed. (2014).
Poole, J. Textbook on contract law. 12th Ed. (2014)
Richards, P Law of contract. 10th Ed. (2011)
Stone, R. The Modern law of Contract. 10th Ed. (2013)
Treitel, G. H. An outline of the law of contract. 6th Ed (2014).
Turner, C Unlocking contract law. 4th Ed. (2014).
Upex, R. V., Bennett, G Chuah, J, Davies, F. R. Davies on contract. 10th Ed. (2008).
Stone,Devenney, Text, Cases and Materials on Contract Law 3rd Ed (2014)
McKendrick, Contract Law Text, Cases and Materials 6th Ed (2014)
Stone, R, Devenney, J Cunnington, R Text, cases and materials on contract law. 3rd Ed (2014)
Burrows, A. S. A Casebook on Contract. 4th Ed.
Beale, H. G., Bishop, W. D. and Furmston, M. P. Contract: cases and materials. 5th ed. (2008)
Blackstone’s Statutes on Contract, Tort & Restitution 2017 (Blackstone’s Statute Series)
UK Practitioners Texts
Chitty on Contracts 32nd Edition, 2 Volumes & Supplement (2016)
The above are not necessarily the latest edition.