Archbolds (Freightage) Ltd v Spanglett Ltd [1961] 1 QB 374
Contract is not illegal merely because it is illegally performed.
Facts
The plaintiffs, Archbolds, were carriers who subcontracted with the defendants, Spanglett, to take a quantity of whisky from Leeds to London. Under the Road Traffic Act 1933 a particular kind of licence, an “A” licence, was required to carry goods belonging to others for rewards. The defendants used a van which had no “A” licence. Due to a miscommunication, the plaintiffs did not know that the defendants lacked the correct licence. The whisky was stolen in transit due to the negligence of the defendants’ driver. The plaintiffs claimed in negligence for the loss of the whisky. The case came to the Court of Appeal.
Issues
The defendants argued that the contract was illegal under the 1933 Act because they themselves lacked the correct licence. Therefore, the contract was unenforceable and the plaintiffs should not be allowed to recover.
Decision/Outcome
The court held that the plaintiffs could recover on the contract. Pearce LJ said the first question was whether the contract was expressly or impliedly forbidden by statute. This was a contract of carriage not a contract to use an incorrectly licensed vehicle. The contract could have been performed using any vehicle. Therefore, the contract of carriage itself was not illegal under the 1933 Act. The only illegality arose out of the way it was performed. The plaintiffs had done nothing to breach the statute. Therefore, they could sue on the contract. However, the defendants could not have recovered the price of the contract as they had breached the statute.
