The Law of Contract - Assignment Example

A classic example was the case of Balfour v. Balfour whereby Mr. Balfour by the use of contract like terms agreed to give his wife £30 a month which was to act as her maintenance for the time he resided in Sri Lanka. After his departure, he stopped the payment and as a result action was brought by Mrs. Balfour so as to recover the payments. The Court of Appeal found that there was no enforceable agreement that was existent on the basis of the evidence available so as to show the intention to be legally bound.

Another case which is cited along this case is that of Merritt v. Merritt wherein the courts distinguished the aforementioned case on the basis that the couple in this case even though married again, had formed the agreement at the time when they were estranged and thus the agreement was said to have been formed with the intention to create legal relations.The principles of public policy whereby a contract can be invalidated that are depriving a party the right to sue in the contract and the other of raising illegality as a defense can be seen in these broadheads of public policy:Contracts which involve or tend to promote sexual immorality (Pearce v. Brooks); contracts which concern matrimony and are deemed to be unacceptable; agreement which include servitude; there can be contracts which allow dealing or transacting with the enemy or to cheat public authorities; contracts which would lead to creation of corruption in public offices; contracts which would create hindrances to course of justice; and ousting jurisdiction agreements.

Another important element that needs to be discussed is the illegality that lies in respect of restraint of trade clauses. These led to the contract being held unenforceable. The criteria that have been laid down so as to allow such a contract to be held legal and valid is that there must be the legitimate interest of the covenantee which could include protection of trade secrets.