Illegality

Contracts are ubiquitous in the corporate world. They enable businesses to engage in deals, expand their enterprises, and obtain financial success. Under 735 ILCS 5/2-613, one affirmative defense available to parties facing a breach of contract claim is illegality. This defense has been broadly defined as contrary to expressed law, contrary to the policy of expressed law, or contrary to good morals. Generally, when a court accepts an affirmative defense of illegality, the contract in question is void.

Illegality can be an issue even when the normal requirements of contracts, such as acceptance of offers, consideration, and contractual capacity, are present. In fact, a court may strike a contract as illegal even if the parties do not raise the issue and genuinely believe the contract is legally binding.

Classic examples of illegal contracts include contracts that enable prostitution, violate tax law, require the destruction of records, place a hit on an individual, and supply illegal gambling machines.

A severance clause might in some instances mitigate the illegality. A severance clause instructs the court to remove the provision of the contract that is illegal as long as the rest of the contract is legal.

If you are in need of assistance in analyzing your duties or defenses under a contract, contact Thomas E. Patterson at tpatterson@pattersonlawfirm.com or (312)-223-1699. 

 
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