When parties sign a contract, they must not only ensure that the subject matter and terms are clear, but also that the purpose behind that contract is lawful. The legality of the purpose or purpose of the contract is an essential principle in the formation of legal agreements, since it determines whether the contract can be valid and enforceable. In this blog, we will explore what it means for the purpose of a contract to be lawful and why it is essential to the validity of the agreement.
What Does the Lawfulness of the Purpose of the Contract Mean?
The legality of the purpose refers to the fact that the final objective of the contract must be in accordance with the law, morality, public order and good customs. This means that the contract must not pursue purposes that are illegal, immoral, or contrary to public order. If the purpose of the contract is unlawful, the contract is considered void and cannot be enforced in court.
Examples of Lawful and Illicit Purposes
- Illicit Purposes:
- Sale of Goods: An agreement to buy and sell legal products, such as electronics or furniture.
- Professional Services: A contract to receive legal, medical, or consulting services.
- Property Lease: An agreement to rent a business premises or a home.
- Illicit Purposes:
- Fraud: A contract designed to deceive third parties or carry out fraudulent transactions.
- Smuggling: An agreement to distribute illegal products, such as drugs or weapons.
- Tax Evasion: A contract whose objective is to hide income to evade taxes.
Importance of Lawfulness of Purpose
Legal Validity: A contract with an unlawful purpose is null and void, meaning that it has no legal effects from its inception. The law will not allow contracts that seek illegal or immoral purposes to be fulfilled or executed.
Legal Protection: The parties involved in a contract must be certain that the agreement is legitimate and does not expose them to legal risks. Maintaining the legality of the purpose guarantees that the parties are acting within the framework of law and public order.
Legal Security: Ensuring that the purpose of the contract is lawful provides security and predictability in commercial and personal transactions, protecting the parties from possible legal conflicts and sanctions.
Consequences of Illegality of Purpose
Nullity of Contract: A contract with an unlawful purpose is considered void and cannot be enforced in court. This means that, from the beginning, the contract has no legal validity.
Inapplicability of Legal Remedies: The parties cannot resort to the law to enforce a contract whose purpose is unlawful. Courts do not intervene in disputes related to such contracts.
Restitution or Sanctions: Parties may be required to restitute any advantages obtained under an unlawful contract and may face legal sanctions, including fines or criminal liability.
Conclusion
In the creation and execution of contracts, ensuring the lawfulness of purpose is crucial to the validity and execution of the agreement. A legally and morally acceptable purpose not only protects the parties involved, but also ensures that the contract can be enforced and defended in a court of law. Maintaining the legality of the purpose of the contract is a fundamental step for any agreement, providing confidence and security in contractual transactions.