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First Principles of Business Law |
| Circumstances that may invalidate a legal transaction |
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7. Illegal transactions |
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7.4. Statutory illegality |
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Read the facts and the question and then choose the best answer. A owns earth-moving machinery which he makes available on short-term hire. B, a landscape gardener, asks to hire two of the machines for three days, saying he will be operating the machines himself. Legislation imposes a fine of $1,000 on any person who operates earth-moving machines without an operator's licence. A asks B if he has the necessary operator's licences and B assures him that he does. B signs a standard hire agreement and uses the machine. But then B fails to pay the agreed price to A. A sues B to enforce payment and in his defence B says he had no licence to operate the vehicles. He says this means that the contract was for an illegal purpose and is not legally enforceable. Is the contract between A and B valid despite the provisions of the legislation? |
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