CHAPTER 6

2LEGAL
POSSIBILITY

2 ELEMENTS -
AGREEMENT
MUST BE
POSSIBLE

PHYSICAL
POSSBILITY OF
EXECUTION
 what is common law
for a contract to be considered legal and can execute CONTRACTS
it has to accomplice with the following CONTRARY TO
COMMON-LAW

LEGAL
POSSIBIILTY
what is statutory law
CONTRACTS
CONSEQUENCES OF
CONTRARY TO
ILLEGALITY
STATUTORY LAW
 AGREEMENT CAN BE
CONTRARY TO
COMMON-LAW -
LEGALLY IMPOSSIBLE
TO EXECUTE /
AGAINST GOOD
reason why agreement that purport to be contracts could be MORALS / AGAINST
contrary to common law PUBLIC POLICY
(INTEREST)

CONSTITUTION =
(3) AGREEMENTS RELIABLE INICATOR
THAT ARE CONTRARY OF GOOD MORAL
TO PUBLIC POLICY CONTRACTS VALUES & PUBLIC
POLICY
CONTRARY
TO
COMMON-
LAW

(2) AGREEMENTS (1) CONRACTS

THAT ARE CONTRARY WHICH CANNOT BE
TO GOOD MORALS LEGALLY EXECUTED
 IF RIGHTS &
DUTIES ITO
CONTRACT
CANNOT BE
PERFORMED IN
ACCORDANCE
WITH GENERAL
LEGAL PRINICPLES
contracts and performance that are illegal

CONTRACT
WHICH
CANNOT BE
LEGALLY
EXECUTED

EXAMPLE:
IMPOSSIBLE TO
BUY & SELL
SOMETHING
WHICH IS NOT
CAPABLE OF BEING
PRIVATELY OWNED
(MOON)
 CONTRARY TO
GOOD MORALS OF
COMMUNITY IF
CONTRACT,
PURPOSE / RIGHTS
& DUTIES AGREED
UPON ARE
CONTRARY TO
WHAT = PROPER &
DECENT

AGREEMENTS
THAT ARE
CONTRARY
TO GOOD
MORALS
CONVICTIONS OF
COMMUNITY WRT EXAMPLE:
GOOD MORAL PROMOTING SEXUAL
VALUES DIFFER MISCONDUCT &
FROM COMMUNITY IMPAIR STABILITY OF
TO ANOTHER & MARRIAGE
CHANGE OVER TIME
 CONTRACT,
EFFECT /
PURPOSE FOR
CONCLUSION =
HARMFUL TO
its harmful to the interest at public large INTEREST OF
PUBLIC AT SHOULD BE
(F) LARGE UNCONSIONA
GAMBILING BLE,
CONTRACTS IMMORAL /
ILLEGAL

(E)
AGREEMENTS
EXISTING
RESTRAINING
INDICATORS
A PERSON'S harmful to OF PUBLIC
FREEDOM TO AGREEMENTS POLICY
PARTICIPATE
IN TRADE
CONTRARY
TO PUBLIC
POLICY

(D) AGREEMENTS
(A)
RESTRAINING A
AGREEMENTS
PERSON'S
INVOLVING
FREEDOM TO
ADMININISTR
PARTICIPATE IN
ATION OF
LEGAL
JUSTICE
TRANSACTIONS

(C) (B)
AGREEMETNS AGREEMENTS
AFFECTING INVOLVING
SAFETY OF CRIMES &
STATE DELICTS
 ANY AGREEMENT
WHICH MISUSES /
THWARTS THE
ADMINISTRATION
OF JUSTICE =
CONTRARY TO
PUBLIC POLICY

EXAMPLE: AGREEMENT
DEPRIVES CONTRACTING
EXAMPLE: AGREEMENTS PARTY OF ANY & ALL
CONTRACT NOT TO
REPORT ANOTHER
INVOLVING OPPORTUNITY TO
PROPERLY DEFEND
PERSON'S CRIME TO ADMINISTRATION HIMSELF AGAINST
POLICE FUTURE WRONGS
OF JUSTICE COMMITED AGAINST
HIM

CONTRACT = VOID
 AGREEMENT TO
COMMT CRIME =
CONTRARY TO
PUBLIC POLICY &
LEGALLY
UNENFORCEABLE

AGREEMENTS
INVOLVING
CRIMES &
DELICTS

ALSO APPLICABLE
WHEN
UNDERTAKING TO
COMMIT A DELICT
(DEFRAUD
CREDITOR /
INSURANCE
COMPANY)
AGREEMENT BETWEEN
PERSON & SUBJECT OF
ENEMY STATE WHICH IS
AT WAR WITH PERSON'S
OWN COUNTRY =
CONTRARY TO PUBLIC
POLICY & NOT
PERMISSIBLE IF
AGREEMENT IS TO
ADVANTAGE OF ENEMY
STATE

AGREEEMENTS
AFFECTING
SAFETY OF
STATE

AGREEMENT TO
PROVIDE MILITARY
SUPPLIES TO
ENEMY STATE =
UNLAWFUL &
INVALID
 SERIOUS
INFRINGEMENT
OF FREDOM OF
ACTION - PUBLIC
POLICY CANNOT
MAY APPOINT COUNTENANCE IT
SPOUSE AS HEIR ROMAN TIMES
THEREBY SUCH
PROVIDING FOR AGREEMENTS
MAINTENANCE OF VOID
SURVIVOR

AGREEMENTS
RESTRAINING
ANTENUPTIONAL PERSON'S
CONTRACTS - NOW -
EXCEPTION TO
FREEDOM TO VOIDABLE
RULE PARTICIPATE IN
LEGAL
TRANSACTIONS

NOT PERMITTED
MUST BE TO UNDERTAKE
DISTINGUISED TO REFUSE
FROM VALID INHERITANCE
DONATIONS UPON FUTURE
DEPRIVED OF
BETWEEN LIVING DEATH OF
FREEDOM OF
TESTATOR
TESTATION BY
AGREEMENT
STIPULATING THAT
POSSESSIONS WILL
BE BEQUEATHED IN
CERTAIN MANNER
 EXAMPLE:
RESTRAINT OF
TRADE

(2)
CONTRACTS
2 TYPES OCCUR
MUST BE
EXECUTED

(1) PURCHASER OF
BUSINESS ENTERPRISE /
PROFESSIONAL PRACTICE
(1) EVERYONE
AGREEMENTS INSISTS ON INCL
SHOULD BE RESTRAINING UNDERTAKING BY SELLER IN
CONTRACT OF SALE -
ABLE TO
PARTICIPATE FREEDOM TO SPECIFIED PERIOD &/
FREELY IN PARTICIPATE WITHIN SPECIFIED
COMMERCE GEOGRAPHICAL ARE, SELLER
IN TRADE WILL NOT PRACTISE
PROFESSOIN / CARRY ON
BUSINESS IN COMPETITION
WITH PURCHASER

(2)
PROTECTION
2 PRINCIPLES OF
OF TRADE
PUBLIC POLICY IN
SECRETES &
CONFLICT
EXAMPLE: EMPLOYEE COMMERCIAL
WILL NOT RENDER CONTRACTS
SAME KIND OF
LABOUR / SERVICE
WITHIN SPECIFIED
PERIOD &/ SPECIFIED
GEOGRAPHICAL
AREA
 WHERE IN
CONFLICT, SET OFF
AGAINST EACH
OTHER

CONTRACTUAL
RESTRAINT OF TRADE COMMITMENT
CONTRACTS, IN REGARDED AS
PRINCIPLE VALID & STRONGER &
ENFORCEABLE TAKES
PRECEDENCE

RESTRAINT OF
TRADE
CONTINUED...
COURT WILL NOT
ALLOW THAT GENERAL IF RESTRAINT
/ SPECIALISED SKILL & UNREASONABLE,
KNOWLEGE THAT COURT WILL NOT
BELONG TO EMPLOYEE GRANT
BE EXCL FROM LABOUR COMMITMENT TO
MARKED BY RESTRAINT CONTRACT
OF TRADE WHERE CLAUDE DID NOT
PROTECT LEGALLY
RECOGNISABLE
INTEREST OF EMPLOYER,
BUT MERELE SOUGHT TO
MINIMISE EXCLUDE
COMPETITION, WOULD
BE AGAINST PUBLIC
POLICY &
UNREASONABLE
 1 PARTY
UNDERTAKES TO
RENDER
PERFORMANCE TO
ANOTHER IF SOME BETTING,
LAW FUTURE EVENT, GAMING,
RECOGNISES DEPENDENT ON GAMBLING &
EXISTENCE OF LUCK, OCCURS WAGERING -
OBLIGATION INTERCHANGE
ABLE TERMS

GAMBLING
LOTTERIES
CONTRACT NOT
ACT 57 OF
ENFORCEABLE IN
1997
COURT

GAMBLING
CONTRACTS
NATIONAL
LAW WILL NOT
GAMBLING
ASSIST IN
ACT 33 OF
ENFORCEMENT
1996

GAMBLING /
LOTTERY DEBTS
@ COMMON-
INCURRED IN
LAW
COURSE OF LAWFUL,
GAMBLING
REGULATED /
CONTRACT UNLAWFUL, LICENCED GAMBLING
MOSTLY UNREGULATE / LOTTERY ACTIVITIES
VALID D REMAIN - VALID &
SUBJECT TO ENFORCEABLE
COMMON
LAW
 FORBIDDEN BY
ACT OF
PARLIAMENT,
PROVINCIAL LAW /
MUNICIPAL
REGULATION
AGREEMENT -
ILLEGAL / UNLAWFUL
@ COMMON-LAW
CONTRACT MAY BE OFTEN REGULATED
ILLEGAL & BY LEGISLATION TO
UNENFORCEABLE EXTED ORIGINAL
PROHIBITION / TO
ADD CRIMINAL
SANCTIONS
CONTRACTS
CONTRARY TO
STATUTORY
LAW
SALE OF WEAPONS
& AMMUNITION /
COURTS WILL
UNPOLISHED
HOLD AGREEMENT
DIAMONDS BY &
- VOID - IF DEFEAT
TO SOMEONE WHO
PUPOSES OF
DOES NOT HOLD
LEGISLATION
LICENCE =
PROHIBITED
LAW FORBIDS
UNAUTHORISED
TRADING IN
LIQUOR WITHOUT
LICENCE FOR
LONGER THAN 1
MONTH

the end of illegal contracts

 UNLAWFUL /
ILLEGAL CONTRACT
= WITH FEW
EXCEPTIONS VOID
UNDER COMMON-
LAW

STATUTORY
ILLEGALITY WILL
VOID CONTRACT IF
LEGISLATURE MAKES NO PARTY ACQUIRES
INTENTION PLAIN BY ENFORCEABLE
ENACTING THAT RIGHTS / DUTIES
AGREEMENT IN FROM CONTRACT
CONTRAVENTION OF
PROHIBITION WILL BE
NULL & VOID CONSEQUENES
OF ILLEGALITY

EXAMPLES:
THWARTING ADMIN
OF JUSTICE,
SOME ILLEGAL
AGREEMENTS
AGREEMENTS NOT
INVOLVING CRIMES &
INVALIDATED, BUT
DELICTS &
ARE UNENFORCEBLE
AGREEMENTS
AFFECTING SERCURITY
OF STATE
 PREFERRED
APPROACH -
DETERMINE
INTENTION OF
LEGISLATURE IN ALL
INSTANCES -
PENTALTY =
SUFFICIENT
PAR DELICTUM WHERE
SANCTION
CONTAINED IN AGREEMENT
WITHOUTH NEED TO
MAXIMUM: IN PARI VOID TO
VOID CONTRACT
DELICTO POTIOR EST ILLEGALITY, NO
CONDITIO POSSIDENTIS PARTY MAY
(WHEN THERE = EQUAL INSTITUE ACTION
GUILT THE POSSESSOR = ON GROUNDS OF
IN THE SRONGER THE UNLAWFUL
POSITION) AGREEMENT

CONSEQUENCES
OF ILLEGALITY THIS RULE
CONTINUED... EXPRESSED IN
MAXIMUM KNOWN
AS RESULT: PAR AS EX TURPI CAUSA
DELICTUM RULE NON ORITUR ACTIO
(NO ACTION ARISES
FROM A SHAMEFUL
CAUSE)

CAN USUALLY
ALSO NOT
RECLAIM ON CANNOT CLAIM
GROUND OF DAMAGES
UNJUSTIFIED
ENRICHMENT
 PAR DELICTUM
APPLIES TO
ACTIONS WHICH
ARE BASED ON
UNJUSTIFIED
ENRICHMENT

CONSEQUENCES
OF ILLEGALITY
CONTINUED...

COURT MAY RELAX

PAR DELICTUM IF
PUBLIC INTEREST
REQUIRES SUCH
RELAXATION
 PERFORMANCE OF
RIGHTS & DUTIES
FLOWING FORM
CONTRACT MUST BE
OBJECTIVELY
POSSIBLEAT TIME
OF CONCLUSION OF
CONTRACT

IMPOSSIBLE TO
PERFORM
SOMETHING WHICH
(C) DETERMINED & HAS NOT BEEN
ASCERTAINABLE DETERMINED & =
PERFORMANCE NOT DETERMINABLE
- PERFORMANCE
POSSIBILITY & SHOULD BE CERTAIN
/ ASCERTAINABLE
CERTAINTY OF
PERFORMANCE

(A) OBJECTIVE
(B) DIVISIBILITY OF
POSSIBLITY TO
PERFORMANCE
PERFORM
 PERFORMANCE
IMPOSSIBLE IF AT
MOMENT OF
CONCLUDING
CONTRACT, IS
OBJECTIVELY
IMPOSSIBLE TO
RENDER
PERFORMANCE
IF PARTIES FAIL EXAMPLE:
TO PERFORM - AMINAL PARTY 1
AMOUNT TO SELLS TO PARTY 2
BREACH OF HAS ALREADY
CONTRACT DIED

OBJECTIVE
POSSIBILTIY
THUS
PERFORMANCE TO
NOT IMPOSSIBLE &
VALID CONTRACT
ARISES, UNLESS
PERFORM NO VALID
CONTRACT
ARISES
AGREEMENT TO
CONTRARY WAS
REACHED

IF POSSIBLE FOR
IF PERFORMANCE
CERTAIN PERSON TO
IS INCONVENIENT
PERFORM, BUT NOT
/ DIFFICUULT
NECESSARILY OTHER
PEFORMANCE =
PEOPLE,
NOT OBJECTIVELY
IMPOSSIBILITY IS
IMPOSSIBLE
MERELY SUBJECTIVE
 IF INDIVISABLE
PERFORMANCE =
OBJECTIVELY
IMPOSSIBLE, NO
VALID CONTRACT
ARISES
ONLY PART OF
DIVISIBLE
PERFORMANCE =
LAW CAN CONVERT OBJECTIVELY
DIVISIBLE IMPOSSIBLE - VALID
PERFORMANCE INTO CONTRACT ARISES IN
INDIVISIBLE 1 RESPECT OF
SEPARABLE PART
WHICH CAN STILL BE
PERFORMED

DIVISIBILITY OF
PERFORMANCE

PERFORMANCE =
LAW CANNOT
INDIVISIBLE IN
CONVERT
CHARACTER IF CAN
INDIVISIBLE
BE RENDERED IN
PERFORMANCE
ONLY 1 MANNER -
INTO DIVISIBLE 1
ENTIRETY
PERFORMANCE =
DIVISIBLE IN CHARACTER
IF PHYISICALLY POSSIBLE
TO RENDER
PERFORMANCE IN
SEPARATE UNITS & IF =
PARTIES INTENTION THAT
PERFORMANCE SHOULD
BE REGARDED AS
DIVISABLE
 IMPOSSIBLE TO
PERFORM UNDER
AGREEMENT WHERE
NATURE OF
PERFORMANCE =
UNCLEAR &
AMBIGUOUS

DETERMINED &
ASCERTAINABLE
PERFORMANCE
LAW DISTINGUISHES
BETWEEN FACULTATIVE PERFORMANCE =
OBLIGATION (RESULTS ON DETERMINED,
DETERMINED ASCERTAINABLE /
PERFORMANCE) & UNCERTAIN MAY DEPEND
ALTERNATIVE & GENERIC ON CONTRACTING
OBLIGATIONS, WHERE PARTY'S RIGHT UNDER
EXERCISE OF SELECTION CONTRACT TO CHOOSE /
RESULTS IN IDENTIFY SPECIFIC
ASCERTAINABLE PERFORMANCE
PERFORMANCE
 PERFORMANCE
WILL BE
DETERMINED IF
PARTIES EXPRESSLY
MENTION
PERFORMANCE IN
AGREEMENT

IF PERFORMANCE
BECOMES EXAMPLE OF
IMPOSSIBLE DETERMINED
WITHOUTH ANY PERFORMANCE =
FAULT ON DEBTOR'S FOUND IN
PERT, DEBTOR WILL FACULTATIVE
BE RELIEVED OF OBLIGAION
OBLIGATION
DETERMINED
PERFORMANCE

FACULTATIVE
OBLIGATION - FACULTATIVE
PERFORMANCE = OBLIGATION = SOME
DETERMINED FROM SIMPLE OBLIGATIONS
BEGINNING OF DEBTOR = AUTHORISED
CONTRACT & TO PERFORM A
CREDITOR = NOT DIFFERENT SPECIFIED
ENTITLED TO CLAIM PERFORMANCE IF HE
DIFFERENT CHOOSES
PERFORMANCE
 PERFORMANCE =
ASCERTAINABLE IF AT
TIME OF CONCLUDING
CONTRACT, PARTIES
AGREE ON CRITERION /
FORMULA TO IDENTIFY
PERFORMANCE / AGREE
THAT SPECIFIED PERSON
WILL DETERMINE
PERFORMANCE

OBLIGATIONS ALSO
ASCERTAINABLE
WHERE
IDENTIFICATION OF
(2) GENERIC
PERFORMANCE
OBLIGATION
DEPENDS UPON
EXCERCISE OF CHOICE /
APPLICATION OF
FORMULA
ASCERTAINABLE
PERFORMANCE

ALTERNATIVE &
(1) ALTERNATIVE
GENERIC
OBLIGATION
OBLIGAIONS -
(PERFORMANCE OF
EXAMPLES OF SUCH
CHOICE)
INSTANCES
 EXISTS WHERE
PARTY MAY SELECT
PERFORMANCE
WHICH = DUE FROM
2 / MORE
DIFFERENT
ALTERNATIVES

IMPOSSIBILITY OF OBJECTS FROM

PERFORMING 1 OF WHICH SELECTION
MANY ALTERNATIVES MAY BE MADE &
WILL NOT RELIEVE QUANTITY TO BE SET
DEBTOR FROM ASIDE, MUST BE
OBLIGATION - WILL ESTABLISHED AT
HAVE TO CHOOSE TIME OF
BETWEEN ALTERNATIVE CONCLUDING
REMAINING OPTIONS CONTRACT
OBLIGATION
(PERFORMANCE
OF CHOICE)

CHOICE =
DEBTOR HAS RIGHT
IRREVERSIBLE &
OF SELECTION
DEBTOR = BOUND TO
(UNLESS OTHERWISE
DELVER CHOSEN
AGREED)
PERFORMANCE
 PERFORMANCE =
DETERMINED BY
DESCRIBING
KIND (GENUS) OF
COMMODITY ITO
SUBJECT TO NUMBER / MASS
ASSUMPTION THAT / MEASURE
GENERIC
THINGS OF PARTICULAR
OBLIGATION
KIND DO EXIST, PARTY TO
INVOLVES
GENERIC OBLIGATION
SELCTION OF
CAN NEVER RELY ON
PERFORMANCE
IMPOSSIBILITY OF
FROM SPECIFIC
PERFORMANCE, SINCE
GENUS
KIND CANNOT BE
EXTINGUISHED

GENERIC
(3) PARTY WHO
OBLIGATION
MUST MAKE VALID
SELECTION - IF NOT DETERMINIATION
AGREED - RIGHT = :
DEBTOR

(1) KIND OF
(2) METHOD OF
COMMODITY
SELECTION -
FROM WHICH
NUMBER, MASS /
SELECTION MUST
MEASURE
BE MADE