Estoppel and Illegal Contracts

Abstract

Illegality is recognised as a difficult area of the law which sometimes produces harsh results. As few cases, however, seem extreme even by the standard of this field: innocent parties who have been tricked into illegal bargains and have transferred goods or paid money to rogues seem to end up with no recompense. The seeming injustice naturally spawn creative attempts to offset the perceived rigour of the doctrine of illegality and estoppel is frequently mentioned as a possible means to do this, though it is never explored more than cursorily. This paper attempts to outline the considerations relevant to estoppel in illegality and to sketch the bounds of its possible use, using the (relatively) familiar case of In re Mahmood v Ispahai to anchor the discussion.