Legality of Subject Matter

In one sentence

A contract must involve a legal purpose; agreements to do illegal things are void.

Plain English

For a contract to be enforceable, what the parties are agreeing to must be legal. You can't have a binding contract to sell illegal drugs, commit a crime, or do anything else against the law. If the subject matter of a contract is illegal, the whole contract is void from the start, and neither party can sue to enforce it. This rule exists because courts won't help people carry out illegal schemes, and allowing such contracts would undermine the law itself.

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Example

Two people sign a contract where one agrees to pay the other $10,000 to commit arson on a building. The contract is void because its purpose is to commit a crime, and neither party can enforce it in court.

Used in a sentence

“The contract was unenforceable because its subject matter—selling counterfeit goods—was illegal.”

Related terms

Public Policy

Contracts that violate society's fundamental interests or values are unenforceable.

Unenforceable

A contract or clause that a court will not force either party to follow, even though it appears valid.

Mutual Consent

Both parties freely agree to the same terms of a contract without pressure or misunderstanding.

Implied Contract

A contract where the parties' intent to be bound is shown by conduct rather than explicit words.

Conditions Precedent

An event that must happen before a party's obligation under a contract kicks in.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.