Chapter Five: Written Documents 1 Unsigned Documents 1


c) Contracts in Furtherance of illegal Purposes



Download 420.81 Kb.
Page9/19
Date31.01.2017
Size420.81 Kb.
#13163
1   ...   5   6   7   8   9   10   11   12   ...   19

3.c) Contracts in Furtherance of illegal Purposes

Alexander v Rayson

Contract is valid but purpose of document is to defraud 3rd party->void


Issue

Ratio

Notes

  • D signs lease from P

  • P made lease into two agreements splitting the rent so that he could defraud city

  • Contract is legal, but document is for defrauding

• If the document itself is meant to be used fraudulently it is equivalent to the document being about an illegal activity


  • P can’t bring action based on contract that was meant to defraud

3.d) Contracts Conferring Benefits as a Result of Crime

Brissette Estate v Westbury Life Insurance Co.

Who gets life insurance if one spouse kills the other?


Issue

Ratio

Notes

  • Couple has life insurance, both listed as “the insured”

  • Surviving spouse gets insurance proceeds

  • Husband murders wife

  • Can wife’s estate get insurance?

• It is public policy that a felon cannot benefit from his/her crime

•If an individual is rewarded a benefit because of a crime they/their estate will be granted the benefit if a contract directly makes them a beneficiary and they were not privy to that contract

  • Party must be beneficiary under insurance to receive benefit

Oldfield v Transamerica Life Insurance Co. of Canada

Insured party dies committing crime: can beneficiaries receive insurance money?


Issue

Ratio

Notes

•Public Policy Rule:

  • A criminal should not be permitted to profit from crime

  • Operates independently from contract law unless modified by statute

  • Rule extends to those who claim through the criminal's estate

  • Rule is inapplicable to innocent beneficiaries

•For this case: Public policy does not apply to bar a claim by an innocent beneficiary named in an insurance policy merely because the insured dies while committing a crime

  • Problem is that it doesn’t disincentivize suicide

  • Though drafting could deal with that

9.Contracts Contrary to Public Policy Expressed in Statute


First Issue: is the contract illegal?

Bigger issue: If it IS illegal, what is the result


Kingshot v Brunskill

Contracts contravening statute, judge won’t do anything


Issue

Ratio

Notes

  • P grows apples as hobby crop, sells to apple farmer, D

  • D slowly takes apples, eventually they get inspected and rejected

  • D refuses to pay and claims the contract is illegal for breaking a statute (which it does)

• The Court cannot read into the regulations exemptions which might appear to the Court to be justifiable in a given set of circumstances

Doherty v Southgate (Township) (KEY CASE)

D trying to take advantage of their own statutory failure, trying to void contract


Issue

Ratio

Notes

  • D entered into contract with P; legislation requires certain conditions

  • D fails to rezone land as agreed, P sues

  • D claims contract void because the legislative requirements weren’t met

•If the statute does not contain a clause voiding contracts that contravene its provisions, the contract will be enforceable so long as there would be no changes to the content of the contract had the statute been followed.

•Policy:

•Legislature doesn’t waste its breath
•If the contract can be voided due to any statutory breach it would allow the plaintiff to wait until they see if the contract is beneficial before deciding whether to void it or not. This removes the risk, which is a fundamental aspect of contracts;


  • Often applies to technical breaches

  • Plaintiff cannot recover by bringing action against statute

  • If contract is void enforcement of public law is happening in private law



Download 420.81 Kb.

Share with your friends:
1   ...   5   6   7   8   9   10   11   12   ...   19



The database is protected by copyright ©ininet.org 2024
send message
    Main page
traditional view
parties have