Contracts & ExecutionQuestion 795 of 1605
A contractor agrees to install an unpermitted electrical system that knowingly violates code and endangers occupants. If a dispute arises over payment, how will a court most likely treat the agreement?
a.As unenforceable because the object of the contract is unlawful
b.As enforceable but with reduced damages
c.As enforceable because both parties agreed to it
d.As voidable only by the homeowner
Explanation
A contract must have a lawful object. A contract to perform an illegal act, such as knowingly installing dangerous, code-violating work, is illegal and therefore unenforceable by either party; courts generally leave the parties where they find them. Mutual agreement cannot cure illegality. This is not merely voidable by one party; illegality makes the entire bargain unenforceable as against public policy.
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