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Anderson Ltd v Daniel [1924] 1 KB 138

Contracts rendered illegal by statute cannot be sued upon.

Facts:

Under s.1(1) Fertilisers and Feeding Stuffs Act 1906 any seller of artificial fertilizer had to provide the buyer with an invoice stating the percentage of chemicals in it. The Act imposed a fine for failing to do this. The plaintiffs sold a quantity of “salvage” (sweepings from the holds of ships) as artificial fertilizer to the defendants but did not supply the defendants with an invoice. The defendants refused to pay, arguing the contract was illegal. The plaintiffs argued they had a defence under s.6 of the 1906 Act as they had a reasonable excuse for not providing an invoice, saying it was the custom of the trade not to provide an invoice for “salvage” as it was prohibitively expensive. The trial judge found for the plaintiffs.

Issues:

The defendants argued that the effect of s.1 of the 1906 Act was to render the contract illegal regardless of whether the plaintiff had a defence under s.6. 

Held:

The Court of Appeal held that when looking at the statute, courts should ask whether the provision was simply to protect revenue or whether it was for the protection of the public. If it was for the protection of the public, the contract would be illegal and the party at fault could not sue upon it. The plaintiffs could not claim a reasonable excuse purely because the cost of providing an invoice was high. However, Atkin LJ said that even if they could have, the contract would still be illegal as the purpose of the statute was to prevent contracts being made without a chemical analysis. 


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