LEGAL PRINCIPLE: CONTRACT LAW – Illegality – Consequences of Illegality – Ex Turpi Causa Non Oritur Actio
PRINCIPLE STATEMENT
Generally, the consequence of illegality in relation to the parties contract is that the court will come to the assistance of any party to an illegal contract who wishes to enforce it. This position of the law is founded on the principle of public policy and is expressed in the maxim ex turpi causa non oritur actio, meaning that an action does not arise from a base cause. Therefore, it goes without saying that the promise or consideration exchanged by the parties herein is illegal and the reason by the parties in making the agreement was to promote an act expressly prohibited by statute.
RATIO DECIDENDI (SOURCE)
Per Achike, JSC, in Pan Bisbilder Nigeria Ltd. v. First Bank of Nigeria Ltd. (2000) NLC-1141991(SC) at pp. 6–7; Paras D–A.
"Generally, the consequence of illegality in relation to the parties contract is that the court will come to the assistance of any party to an illegal contract who wishes to enforce it. This position of the law is founded on the principle of public policy and is expressed in the maxim ex turpi causa non oritur actio, meaning that an action does not arise from a base cause. Therefore, it goes without saying that the promise or consideration exchanged by the parties herein is illegal and the reason by the parties in making the agreement was to promote an act expressly prohibited by statute."
EXPLANATION / SCOPE
The maxim ex turpi causa non oritur actio—no action arises from a base cause—bars enforcement of illegal contracts. Courts will not assist parties seeking to enforce agreements founded on illegality. This public policy principle prevents judicial resources from being used to further illegal purposes. The contract is unenforceable because it promotes conduct prohibited by statute. Neither party can claim relief under an illegal contract. The court leaves the parties where it finds them. This applies regardless of which party sues. Illegality infects the entire transaction, making it unenforceable.