When it comes to contracts, legality is one of the most important factors that come into play. An illegal contract is one that violates the law or public policy. It is important to note that generally, neither party to an illegal contract can sue for a breach of such a contract. But is this statement true or false?
The answer is mostly true. When a contract is deemed illegal, it is unenforceable by law, meaning that neither party can rely on the court system to enforce the terms of the agreement. This is because the court system cannot uphold an agreement that is illegal in nature.
However, there are some exceptions to this general rule. Both parties may be able to sue for a breach of the illegal contract if they are innocent parties. An innocent party is one that is not aware of the illegal nature of the contract when they entered into it and did not have any intention to violate the law.
For example, if a party enters into a contract with another party to transport illegal drugs across state lines, then the contract is illegal and unenforceable. In this scenario, neither party can sue for a breach of the agreement. However, if a party entered into the contract believing that they were transporting legal goods, then the party may be able to sue for a breach of contract if the other party failed to deliver the goods promised.
Another exception to this general rule is if the contract is divisible. A divisible contract is one that contains several separate agreements. If one of the agreements is illegal, then the other agreements may still be enforceable by law. In this case, the innocent party could still sue for a breach of the legal agreement.
In conclusion, it is generally true that neither party to an illegal contract can sue for a breach. However, there are exceptions to this rule, such as when the party is an innocent party or when the contract is divisible. It is important to consult with a legal expert to determine the legality of a contract before entering into one.