united-states united-kingdom contract-law ireland
Is there a law against signing a contract to do something illegal?
<p>Inspired by this question over on workplace.SE  - <a href="https://workplace.stackexchange.com/questions/187089/severance-contract-requires-a-lie-is-this-enforceable">Severance contract requires a lie. Is this enforceable?</a></p>
<p>If you sign a contract wherein you agree to do something illegal, but have no intention of committing the act (and never actually do), is that still illegal itself?</p>
<p>In the linked question, the OP is required to lie about the reason he left a company (i.e. say that he voluntarily quit when he was actually laid off) which could mean lying to the social welfare office, which would be illegal.</p>
<p>Presumably he cannot be legally bound to commit an illegal act and his company would fail if they tried to sue him for breach of the contract in this case. But could the law take exception to the fact that he signed it, thereby making the agreement in the first pace?</p>
<p>After all, it would be signing a contract in bad faith, and also creates a small legal mess.</p>
<p>(OTOH maybe the onus is on the person writing the contract to make sure everything they want the signer to do is legal)</p>
<p>A hypothetical question, that originated in the United States but also interested in other jurisdictions.</p>

<p>it's not illegal to sign a contract that demands illegal things, however, such a contract, in general, is called an illegal contract.</p>
<h1>Illegal contracts are null and void.</h1>
<p>Contracts that violate public policy never have force in the first place. A contract can't force people to declare lies under oath or demand them to murder someone. Thus, a contract demanding such is illegal.</p>
<p>As a result, such a clause would not just be unenforceable, it might void the entire contract wholesale if it is not severable. In the least, any clause demanding illegal acts was <a href="https://content.next.westlaw.com/Glossary/PracticalLaw/I41334c8d07ef11ebbea4f0dc9fb69570?transitionType=Default&amp;contextData=(sc.Default)&amp;firstPage=true" rel="noreferrer">null and void <em>ab initio</em></a>, and <strong>never</strong> was valid.</p>
<h3>void contracts in law</h3>
<ul>
<li><a href="/questions/tagged/germany" class="post-tag" title="show questions tagged &#39;germany&#39;" rel="tag" aria-labelledby="germany-container">germany</a> explicitly makes contracts void that are &quot;Sittenwidrig&quot; in <a href="https://www.gesetze-im-internet.de/bgb/__138.html" rel="noreferrer">§ 138 BGB</a> and also illegal ones in <a href="https://www.gesetze-im-internet.de/bgb/__134.html" rel="noreferrer">§ 134 BGB</a>
<ul>
<li>Declarations to the <em>Agentur für Arbeit</em> are made under threat of perjury, and thus lying is illegal. It is also <em>Sittenwidrig</em>. This makes the provision void.</li>
<li>Murder is illegal, inciting to murder someone is illegal, and so a contract to murder someone for pay is void. Such a contract <em>also</em> is Sittenwidrig.</li>
<li>Selling the right to ask to marry your daughter per see isn't illegal, but it is Sittenwidrig and as such the contract is void.</li>
</ul>
</li>
<li><a href="/questions/tagged/california" class="post-tag" title="show questions tagged &#39;california&#39;" rel="tag" aria-labelledby="california-container">california</a> judges refer to such contracts as <a href="https://repository.uchastings.edu/cgi/viewcontent.cgi?article=1658&amp;context=hastings_law_journal" rel="noreferrer">illegal contracts</a>, defining this as a test where making non-enforcement of such a contract something of public interest:
<ul>
<li>It is in the public interest that people tell the truth to the unemployment office, so a contract demanding you to lie is illegal.</li>
<li>It is illegal to lie on the stand (<a href="/questions/tagged/perjury" class="post-tag" title="show questions tagged &#39;perjury&#39;" rel="tag" aria-labelledby="perjury-container">perjury</a>), and thus the contract is illegal.</li>
</ul>
</li>
</ul>
<h1>Conspiracy</h1>
<p>However, the contract can also be evidence of criminal activity in itself: It manifests the will of two parties to commit an illegal act. That is the core of a conspiracy charge. <strong>Conspiracy is illegal and usually a felony.</strong></p>
<ul>
<li><a href="/questions/tagged/germany" class="post-tag" title="show questions tagged &#39;germany&#39;" rel="tag" aria-labelledby="germany-container">germany</a>: Conspiracy to commit a crime is <a href="https://www.gesetze-im-internet.de/stgb/__30.html" rel="noreferrer">§30 STGB</a></li>
</ul>

<p><a href="/questions/tagged/england-and-wales" class="post-tag" title="show questions tagged &#39;england-and-wales&#39;" rel="tag" aria-labelledby="england-and-wales-container">england-and-wales</a></p>
<p><strong>Is there a law against signing a contract to do something illegal?</strong></p>
<p>There's no law (that I can find) against signing such a contract, but there is the offence of conspiracy; being an agreement to do something illegal (it's irrelevant whether it is actually carried out or not), contrary to <a href="https://www.legislation.gov.uk/ukpga/1977/45/section/1?timeline=false" rel="noreferrer">section 1(1)</a>
Criminal Law Act 1977:</p>
<blockquote>
<p>... if a person agrees with any other person or persons that a course of conduct shall be pursued which, <strong>if the agreement is carried out in accordance with their intentions</strong>, either—</p>
<ul>
<li><p>(a)will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement, or</p>
</li>
<li><p>(b)would do so but for the existence of facts which render the commission of the offence or any of the offences impossible,</p>
</li>
</ul>
<p>he is guilty of conspiracy to commit the offence or offences in question.</p>
</blockquote>
<ul>
<li><strong>HOWEVER</strong></li>
</ul>
<p>This offence does not appear to be committed in this scenario as the above emboldened text requires the conspirators to intend to carry out the illegal act (i. e. have the required <a href="http://www.e-lawresources.co.uk/Mens-rea-intention.php" rel="noreferrer"><em>mens rea</em></a>), a fact which is missing from the OP:</p>
<blockquote>
<p>... you agree to do something illegal, but have <strong>no intention of committing the act</strong> ...</p>
</blockquote>

<p>It is not illegal to sign a contract. On the other hand, it is illegal (fraudulent) to enter into a contract intending to not do what is required of you. On the third hand, the lying clause would be unenforceable, thus action based on fraud in contract formation would be impossible. So signing such a contract is legal (insofar as &quot;illegal&quot; in contracts doesn't have a clear meaning, we assume you mean &quot;enforceable&quot;).</p>

<p>It is not, in general, illegal simply to sign (or otherwise agree to) a contract that requires an illegal act. In many cases it is a crime to attempt to persuade someone else to commit a crime, and particularly to pay (or offer to pay) a person to commit a crime.</p>
<p>Such a contract could be considered to be the start of a <em><strong>conspiracy</strong></em>, and if any of those agreeing does an overt act toward carrying out the crime, they might all be guilty of conspiracy.</p>
<p>It is not a crime to negotiate or sign a contract in bad faith, although if the matter goes to court such bad faith may make the contract invalid, or cause the person who acted in bad faith to lose the case. However, if one lies or deceives as part of a contract negotiation in an attempt to gain a benefit, that may well be fraud.</p>

<p>The premise is faulty, though.</p>
<p>In your linked example, the person is actually in error about there being any lying.  What person and company were agreeing to was to cancel the layoff, and the employee to voluntarily quit.   There is a fair quid pro quo: the company pays out money yet avoids and unemployment claim and other consequences of a layoff... and the employee collects a severance that is presumably more generous than they'd be likely to get from an unemployment claim, while also being able to claim a voluntary quit to subsequent employers rather than admitting they had been culled (laid off).</p>
<p>It is rather bad planning to be doing it retroactively, but I see no barrier to the parties agreeing to do that. Once they agree to do that, it is what happened and is not a lie.</p>
<p>So don't underestimate the power to <em>create reality</em> under contract law. If so-called &quot;reality&quot; has its foundation in an agreement between two people, and both people agree on a different reality, then it is so.</p>
<p>I've used that with misguided medical debt collectors, getting them to agree no <em>valid</em> debt ever existed, and hence no debt forgiveness occurred, and hence no taxable event occurred.</p>
<p>As to your core question, &quot;illegal&quot; is a pretty big spectrum.</p>
<p>If the illegal act is a crime, then the contract is <strong>conspiracy to a crime</strong>. If you find yourself desperately needing to convince a jury you never intended to do the crime... good luck lol.  Self-admissions are almost unassailable.</p>
<p>On the other end of the spectrum, you are an apartment manager with 1000 apartments, and you want electric dryer hookups added to them. Most of your move-ins have dryers with the old ungrounded plug.  So you hire me to wire the dryer circuits with the old ungrounded socket.  <em>That's been illegal since 1996</em>.  But you're not going to prison for conspiracy for that one.  <em>You probably can't even back out of the contract</em>, since it's trivial to install a grounded socket for the same cost. And every dryer manufacturer has a simple procedure to change to the grounded plugs for $12, so it's no impediment to tenants. Since a reasonable solution is at hand, the illegality is simply ignored in this case.</p>

<p><a href="/questions/tagged/england-and-wales" class="post-tag" title="show questions tagged &#39;england-and-wales&#39;" rel="tag" aria-labelledby="england-and-wales-container">england-and-wales</a></p>
<p>I disagree with <a href="https://law.stackexchange.com/users/35069/rick">Rick</a>'s <a href="https://law.stackexchange.com/a/83846">answer</a>.You shall need to read the chapter on Illegality in contract law textbooks. Fortunately for you, some of them upload their chapter on Illegality online for free, instead of printing it in the book, because Illegality in Contract Law is seldom covered in UK undergraduate law degrees.</p>
<p><strong>Scroll down to the bottom at <a href="https://learninglink.oup.com/access/mckendrick10e-student-resources#all_resources" rel="nofollow noreferrer">Ewan McKendrick, <em>Contract Law: Text, Cases, and Materials</em> (2022) 10e student resources</a>. &quot;Chapter 20B Additional material: Illegality&quot; is what you need.</strong></p>
<p>If you feel like reading a book, read Chapter 11 ILLEGALITY in <em>Anson's Law of Contract</em> (2020 31e), pages 405-6. I cannot quote the whole chapter, because it ends at page 434.</p>
<blockquote>
<h3>1. INTRODUCTION</h3>
<p>It is not easy to set out in clear terms what the law is on ‘illegality’ in relation to contracts.1
This is not only because the law itself has historically been complex and opaque but
also because distinctions have been drawn by judges and commentators alike that have
tended to confuse rather than illuminate. As a matter of exposition, a central problem
has been a failure to recognize that, while there is an initial question as to what counts
as ‘illegality’ for these purposes (ie what types of conduct are covered by ‘illegality’),
the vast bulk of the law is concerned with the effect of illegality on a contract and on
consequential restitution (ie the recovery of benefits conferred under the contract). If
one straightaway asks whether the conduct in question renders a contract unenforceable
for illegality, one has already strayed into the question of the effect of illegality on the
contract. Similarly, if one straightaway asks whether the conduct in question renders a
contract illegal, one will have in mind, and will therefore be straying into the question
of, the effect of a contract being classed as illegal. Clear exposition dictates that the two
questions—what counts as illegality and the effect of illegality—are kept distinct and
that the second requires by far the most detailed consideration. This chapter attempts
to do that.<br />
      The two questions that will therefore be separately addressed are: (i) what counts
as illegality and (ii) what is the effect of illegality on a contract and on consequential
restitution? The first can be dealt with fairly quickly; and the good news on the second
question is that (after a period of confusion caused by conflicting approaches in a
trilogy of Supreme Court cases)2 the law on the effect of illegality has been transformed for the better, and simplified, by the Supreme Court in the leading case of <em>Patel v Mirza</em>.3
Various difficult rules that previously applied, including distinctions between illegality
in formation and illegality in performance, and, especially importantly, the ‘reliance
rule’ (ie the rule that the effect of illegality turned on whether the claimant was relying
on the illegality in framing its cause of action), have been replaced by a flexible ‘range
of factors’ approach. Under the new approach, it is also no longer necessary to apply
the Latin maxims, which have unhelpfully been given prominence in the past, <em>ex turpi
causa non oritur actio</em> (‘no action arises from a disgraceful cause’) and <em>in pari delicto
potior est conditio defendentis</em> (‘where both parties are equally in the wrong the position
of the defendant is the stronger’).<br />
      Contracts in restraint of trade have tended to be treated separately from the rest
of the law on illegality4 and, for that reason, and because of their great importance in
practice, they will be afforded separate treatment at the end of this chapter (albeit that
some of the cases considered under severance, including the leading case, are restraint
of trade cases).</p>
</blockquote>
