LEGAL PRINCIPLE: CONTRACT LAW — Illegality — Lawful Contract — Claim Not Defeated by Illegality of Another Contract
PRINCIPLE STATEMENT
A claim under a lawful contract will not fail by reason of illegality in another contract if the plaintiff can establish his case without reference to the illegal agreement.
RATIO DECIDENDI (SOURCE)
Per Ayoola, JSC, in Onwuchekwa v. Nigeria Deposit Insurance Corporation (2002) NLC-982000(SC) at p. 9; Paras C–D.
"Where the plaintiff's claim is under a lawful contract such will not fail by reason of illegality of another contract if the plaintiff can establish his case without reference to another illegal contract to which he is a party. A claim under a lawful contract will not fail by reason of illegality in another contract if the plaintiff can make out his claim without reference to the illegal agreement."
EXPLANATION / SCOPE
The illegality of one contract does not infect a separate lawful contract. If the plaintiff can prove their claim without relying on the illegal agreement, the claim succeeds. The court will not allow the illegality of a collateral transaction to defeat a lawful claim. The principle prevents guilt by association. The plaintiff must be able to establish the case independently. The rule applies where the illegal contract is not integral to the claim. The court examines whether the claim requires reference to the illegal agreement. The principle protects innocent parties. The plaintiff cannot rely on the illegal contract as part of the cause of action.