Contract Law - Lecture 20A Illegality Introduction . The law in this area can be quite complicated. . The crux of the principle is that illegal conduct can operate as a defence to a claim for breach of contract. . If a contract is tainted by illegality, shouldn't be able to enforce it · Principlie · Illegality could arise in a wide range of scenarios. Tinsley v Milligan · Put money together to buy house . Milligan wanted to avoid putting her own name on the agreement so she could make false social security claims · Agreed with C that house should be put in his name · They fell out . D tried to claim for her share of contract . C argued shouldn't be able to claim because of her conduct . Milligan was arguing that under trust law there is the assumption that when you put money into a property you have a share in it · Conduct can be . Trial and CofA held in appeal that Milligan should be able to recover her share of the property . The House of Lords insisted that a claim should succeed if the claimant does not need to rely upon any illegality, and the claim should fail if the claimant needs to rely on illegality. . Milligans claim was one of trust . Reliance principle - if a claim is brought and there is an issue of illegality and the claimant doesn't have to rely on the illegality then the claim should succeed Patel v Mirza . Mr Patel brought a claim for breach of contract and unjust enrichment. . Mr Mirza resisted the claim on the basis of illegality, arguing that the agreement between the parties amounted to a conspiracy to commit an offence of insider dealing under sec 52 of the Criminal Justice Act 1993. . The Supreme Court held that Mr Mirza should repay the sums totalling £620,000 which Mr Patel transferred to him. . Lord Toulson said that there are 2 broad policy factors which underpin the illegality defence: 1. A person should not profit from his illegal conduct - the law doesn't support 2. The law should be coherent and not self-defeating . "I would say that one cannot judge whether allowing a claim which is in some way tainted by illegality would be contrary to the public interest, because it would be harmful to the integrity of the legal system, without (a) considering the underlying purpose of the prohibition which has been transgressed, (b) considering conversely any other relevant public policies which may be rendered ineffective or less effective
by denial of the claim, and (c) keeping in mind the possibility of overkill unless the law is applied with a due sense of proportionality. We are, after all, in the area of public policy." · Trying to say whether defence of illegality should be allowed to prevent a claim for breach would be a matter of considering different things · The underlying