Alexander v Rayson [1936] 1 KB 169
Illegality includes lawful contracts made for unlawful purposes.
Facts
The plaintiff, Alexander, agreed to rent a flat in Piccadilly to the defendant, Mrs. Rayson, at a rent of £1200 a year. This included the provision of certain services by the plaintiff. However, in order to reduce the rateable value in the eyes of the local council, the agreement was effected by two documents. The first was a lease of the flat for a rent of £450 a year. The second was an agreement to render services which were virtually the same as under the lease for £750 a year. When Rayson refused to pay some of the rent the plaintiff sued her. At first instance, the trial judged held that the contract was lawful and there was no intention to perform it in an unlawful manner. The defendant appealed.
Issues
The defendant argued that the agreement should be void for illegality because it had an illegal object. By splitting the agreement into two parts the plaintiff hoped to defraud the local council by convincing them that the rateable value of the premises was lower than it actually was. Therefore, the agreement should be void as it was contrary to public policy.
Decision/Outcome
The Court of Appeal allowed the appeal and found for the defendant. It was obvious that the plaintiff intended to commit fraud against the council. The attempt only failed because the defendant disclosed the matter. The court held that where a contract was intended to be used for an unlawful purpose courts will not enforce it.
Updated 19 March 2026
This article accurately summarises the facts, issues, and outcome of Alexander v Rayson [1936] 1 KB 169, which remains a valid and frequently cited authority on illegality in contract law, particularly the principle that a lawful contract made for an unlawful purpose will not be enforced.
Readers should be aware, however, that the broader law on illegality in contract has developed significantly since 1936. The Supreme Court’s decision in Patel v Mirza [2016] UKSC 42 substantially reformed the approach English courts take when a contract is tainted by illegality. Rather than applying rigid rules, courts now apply a range of factors — including the purpose of the rule breached, the proportionality of denying a remedy, and the public interest — to determine whether a claim should be barred. Alexander v Rayson itself remains good law as an illustration of the illegality principle, but students should understand it in the context of the more flexible Patel v Mirza framework, which now governs how such cases are analysed.
