Void contract; Is an agreement by a person who is not hereby declared to be competent

to contract. Void contract is not a contract at all. Void means an agreement which is without any
legal effect. Void contract is considered invalid from its creation, most common due to not
having the normal requirement of a valid contract. For instance, contract when both is minors is
void because minors don’t have legal capacity. Examples of void contract are such as; contract
between legally incompetent parties or minors, contract that restrict trade, also contract with
uncertain material terms. Under section 11(2), (2) (1) (j) of Law of contract Act. [Cap.345]. 1 for
instance in the case of Eastham V Newcastle united FC Ltd (1964) Ch 413.2

Fact:

A well-known footballer challenged the legitimacy of the football association transfer system.
The FA rules meant that a club could retain a player’s registration even after his contract had
ended and so could be used to prevent him from playing again. Players could be also placed on
the transfer list against their will.

Held:

The court held that the rules were an unlawful restraint of trade and were unenforceable.

Also in another case of Nordenfelt V Maxim Nordefelt Co. (1894) AC 535.3

Facts:

A vendor sold an arms business subject to a restrain preventing the buyer from engaging in the
armaments business anywhere in the world for being of 25 years.

Held:

The court enforce the clause as the world being the appropriate market. It was not too wide.

Illegal contract or illegal agreement; is any contract that forbidden by law, Is any
agreement that is against the law, and it also bring punishment, both parties received the same
punishment. For instance in the case of Hall V Woolston hall leisure Ltd (2000) 4 ER 787.4

1
Law of contract Act. [Cap.345 R.E 2019].
2
Eastham V Newcastle united FC Ltd (1964) Ch 413.
3
Nordenfelt V Maxim Nordefelt Co. (1894) AC 535.
4
Hall V Woolston hall leisure Ltd (2000) 4 ER 787.

1
Fact.

The claimant was dismissed when she became pregnant and alleged sex discrimination
contrary to the Employment right Act 1996. The employer claimed that the contract of
employment was itself illegal and unenforceable because the claimant was aware that the
employer was paying and recording her wages in such a way as to defraud the inland revenue of
tax.

Held.

The court held that the illegality was caused by the employer and was irrelevant to the claim, so
compensation for unfair dismissal was possible. While the claimant was aware of the
arrangement it was for the employer’s benefit and she had no control over it.

Also in the case of Tinsley V Milligan (1993)3 WLR 126.5

The two parties jointly bought a house in the first party’s name so that the second party could
make fraudulent claims for state benefits. The second party later tried to claim a share of the
property under a resulting trust arising out of her contribution to the purchase of the house. The
first party argued that the agreement was void for illegality and unenforceable.

Held:

The court held that the second party was not merely trying to enforce an illegal contract but was
asserting a property right arising under a trust so the agreement was enforceable.

The different between a contract being found illegal and the one being void.

I. Void agreement/void contract is an agreement which lacks legal enforceability,

for example plastic bags were among of the business which is valid contract but
according to policy reason of the country especially in Tanzania after president
Magufuli enter in leadership in 1/6/2019 where by the plastic bags were
prohibited (no long needed) so from the anyone who engage in plastic bag
business the contract will be deemed void, while Illegal agreement are these
agreement whose creation is forbidden by the court of law. For example people

5
Tinsley V Milligan (1993)3 WLR 126.

2
 who enter into a contract about drugs e.g. marijuana the contract is will be
deemed as illegal because drugs are forbidden by the court.
II. A void agreement. An agreement became void when it loses enforceability by
law, for example, an agreement by incompetent parties under section 11 6,
agreement which consideration or objects are lawful under section 23 7, agreement
made without consideration under section 258, while Illegal agreement is a void
abinitinal i.e., void from the very beginning. For example marijuana, heroin and
cocaine.
III. In void agreement parties are not liable for any penalty under law. For example
plastic bags because of the policy of Tanzania people who enter in the contract
they will be required to pay for damages but cannot be penalized under the law.
While Illegal agreement parties are penalized. For example A engages B to
murder C and borrows Rs 5000 from D to pay B. B is aware of the loan. Here
the agreement between A and B is illegal and the agreement between A and D is
collateral to an illegal agreement.
IV. Void agreement is in wide range. For example the policy of Tanzania deemed a
wide range of contracts void like the policy of viroba (alcohol) and the policy was
created because many students were involved in alcohol. While illegal
agreement are in narrow range. For example the agreement about drugs the
mostly done in secrecy therefore are in narrow range therefore cannot be
published.
V. Void agreement may not be considered as a crime, for example a contract signed
by a minor, as minors are not considered to have the legal capacity to into a
contract, under section 11 (2)9 parties in void contract could not take as crime if at
the begging of that contract one part does not aware if another part is in capacity.
While illegal agreement cannot be may be legal. For example a contract for
illegal drugs as it is against the law to engage in such activities. Illegal contract
parties will take as crime. Example when A enter to an illegal agreement with B

6
The Law of Contract Act [CAP. 345 R.E 2019]
7
ibid
8
ibid
9
ibid

3
 knowing very well that B is the thief steal flat screen then later selling to A that is
an illegal contract hence both A and B will be criminal liable.

CONCLUSSION:

void contract and illegal contract are knowing are strictly prohibited by law so that we have to be
very serious when enter into a contract so as we can make our right and duties are maintained
as we knows that void contract is really not a contract at all while illegal contract some
agreements are illegal in themselves (ex-contracts of immoral nature, opposed to public policy)

4
 REFERENCES

STATUTES.

Law of contract Act. [Cap.345 R.E 2019].

CASES LIST.

Eastham V Newcastle united FC Ltd (1964) Ch 413.

Nordenfelt V Maxim Nordefelt Co. (1894) AC 535.

Hall V Woolston hall leisure Ltd (2000) 4 ER 787.

Tinsley V Milligan (1993)3 WLR 126.