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REMEDIES OF A DEFECTIVE CONTRACT

  • Reformation : Rewriting of the contract.
  • Rescission : Unmaking of the contract between parties.
  • Restitution : Restoring the injured party to its position before the contract.
  • Specific performances : Performance when monetary damages would be inadequate.

TYPES OF DEFECTIVE CONTRACTS

EVIDENCE OF ILLEGAL CONTRACTS

  • Rescissible contracts
  • Voidable contracts
  • Unenforceable contracts
  • Void contracts

NOTION OF DEFECTIVE CONTRACTS

The subject as defined by the contractors themselves, in the convention, has to be illegal.

How ? Violation of the law or public policy

Presumption of lawfulness

A contract is defective when it may need to be set aside or rescinded because it does not respect all the necessary conditions which would make a contract valid.

Illegality must be proved by a person seeking to rely on it.

DEFINITION OF A CONTRACT

CAUSES AND CONSEQUENCES OF ILLEGAL CONTRACTS

Courts will not enforce the convention because they do not consider those agreements as contracts.

A contract is a legal agreement made between two or more parties, that are willing together to commit to a defined object, leading towards the creation of obligations between them.

They are said to be void or "unenforceable"

  • Will be considered as non-existent
  • "Defense of illegality".

REMEDIES

Elements of a valid contract :

Enforcement : A party may be able to claim for damages on the contract under certain terms.

  • Offer and acceptance
  • Intention of creating legal relations
  • Capacity of the parties
  • Valid consent without fraud or duress
  • Consideration
  • Legal object

Restitution : The general rule is that money paid or property transferred under an illegal contract cannot be recovered back.

There are many exceptions to this rule.

Severance : Sometimes, a contract is only partly illegal which in consequence means that the lawful part will be enforced, under certain conditions.

DEFINITION OF AN ILLEGAL CONTRACT

DEFECTIVE AND ILLEGAL CONTRACTS

Ilex Coursebook : "Authors have always had trouble in classifying the separate heads of illegality" "The law on this area is completely unsatisfactory and full of contradictions".

Agreement that was made between two parties which in its purpose violates the law or public policy. The performance or formation of the agreement causes the parties to engage in an activity that is illegal.

What is a defective contract and what makes a defective contract illegal ?

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