Practice question
An agreement that is not illegal per se but is merely prohibited by a noncriminal protective law is designed to protect one participant, whom the court finds free from fault and within the protected class. The court also finds that allowing recovery of money paid would enhance public policy. The other party invokes a blanket rule that every payment under every illegal contract is irrecoverable. Which answer is best?
- The blanket rule is correct regardless of protective legislation.
- The payment automatically validates the prohibited contract.
- Every participant must receive double the payment.
- The court must enforce future prohibited performance as the only remedy.
- Article 1416 permits recovery under the stated protective-law and public-policy conditions without validating the prohibited contract.
Legal references
- https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, articles 1346,1352,1409–1412 and 1416,1420–1422.
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