contract act 1872A made an agreement  with B to supply the 100 bottles of liquor after 2 months. meanwhile the govenment ban the liquor,  A shuts down. do B gets damages claim? 

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litteacher8's profile pic

litteacher8 | High School Teacher | (Level 3) Distinguished Educator

Posted on

Number 5 makes an interesting point.  If the government outlawed alcohol, the contract is void.  Did A defruad B?  Can B prove that A knew that the government was going to outlaw alcohol?  If A knew, why didn't B?  Was the ban just out of the blue?  If not, then B made a risk entering into the contract, but A is not at fault.  B made a gamble and lost.

ask996's profile pic

ask996 | High School Teacher | (Level 1) Senior Educator

Posted on

Two things that might be considered: 1)Should A have reasonably been expected to fulfill the terms of the contract prior to the government ban on alcohol; and 2)Frequently, when the government makes a policy change, there is some sort of grandfather clause included. Those things being considered, B might have legal recourse.

larrygates's profile pic

larrygates | College Teacher | (Level 1) Educator Emeritus

Posted on

The contract is void once liquor is made illegal as the contract itself is against public policy. One cannot recover damages for failure to perform a contract which is on its face illegal. By the same logic, gambling debts are not legally collectible in states which have statutes prohibiting gambling. Similarly, to use an extreme example, "hit" contracts are also not collectible legally. Any contract must be legal on its face for it to be collectible. B made a bad deal, apparently, and must now live with the consequences.

lrwilliams's profile pic

lrwilliams | College Teacher | (Level 1) Educator

Posted on

With the little information you have given I would say that the contract would become void once the government made alcohol illegal. There is a clause in the Act that states that the agreement is void if the consideration and objects are unlawful in part. Once the government makes alcohol illegal the contract becomes void.

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