LEGAL POSSIBILITY

• Legal Possibility to Perform

  Two elements: Legal Possibility and Physical Possibility
• Agreement must be possible

  • Legal Possibility: Rights & duties permitted by law
  • Physical Possibility: Agreement can be physically carried out
• Legal Possibility


  Rights & duties permitted by law
• Unlawful/Illegal


  Forbidden by statute or common law
• Contracts contrary to the common law are legally impossible
• Contracts contrary to the common law


  • Against good morals
  • Against public policy
• To determine common law legality, a weighing and balancing of a variety of interests is required, such as looking at values in the Constitution
• Public policy derives from the Constitution's values of human dignity, equality, freedom and non-racialism
• Legally impossible contracts


  • Contracts which cannot be legally executed
  • Agreements contrary to good morals
  • Agreements contrary to public policy

  
• Contracts contrary to public policy

  • Agreements involving the administration of justice
  • Agreements involving crimes and delicts
  • Agreements affecting the safety of the State
  • Agreements restraining a person's freedom to participate in legal transactions
  • Restraint of trade
  • Gambling contracts
• Contracts contrary to statutory law

  • Contracts forbidden by an Act of parliament, provincial law or municipal regulation
  • Contracts that defeat the purpose of statutory law
  • Contracts that contravene a prohibition in an Act
  • Contracts infringing on any provision of the Bill of Rights
• A contract between two parties for the sale of a human kidney would be illegal under Section 60(4) of the National Health Act 61 of 2003
• The ban on the sale of liquor and tobacco products during level 5 of the lockdown period was a statutory prohibition
• Consequences of illegality


  • Unlawful/illegal contract is void under common law
  • Statutory illegality may void a contract or impose a sanction
  • Unenforceable contracts - valid but cannot be enforced in court

  
• Ex turpi causa rule

  No action arises from a shameful cause - no party may institute an action against the other to claim performance on the grounds of an unlawful agreement
• Par delictum rule


  When there is equal guilt, the possessor is in the stronger position - where both parties are equally guilty, the person who has received something in terms of the unlawful contract is in the stronger position and the other party cannot reclaim their performance