Supervening illegality CASES

In English contract law, supervening illegality arises where a contract that was lawful when formed later becomes illegal due to a change in the law.

Definition and principles

Supervening illegality occurs after contract formation and renders further performance unlawful. Unlike initial illegality, the parties are not at fault at the time the agreement is made.

The doctrine reflects the principle that the law will not require parties to perform obligations that have become illegal.

Effect on the contract

Where supervening illegality applies, the contract is typically discharged automatically. The parties are released from future obligations, but rights accrued before the illegality may still be enforceable.

Relationship with frustration

Supervening illegality is often treated as a category of frustration, as the change in law fundamentally alters the legal basis of performance and makes it impossible or unlawful to continue.

Practical importance

The doctrine provides certainty where legal change intervenes, protecting parties from liability for non-performance caused by developments beyond their control.