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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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7.3. Common law illegality continued... |
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Read the facts and the question and then choose the best answer. A owns retail premises in a Melbourne shopping precinct. He leases the shop to B, who intends to operate a business selling erotic videos and pornographic magazines. The lease has a term of three years, but after six months B falls behind with his rent payments. A eventually terminates the lease and brings an action to recover the $5,000 that B owes him in unpaid rental. B defends the action on the basis that the lease was for a purpose that promoted sexual immorality. This, he says, is contrary to public policy and the lease is therefore not enforceable at law. Is B correct? |
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