Foster v Driscoll
An English contract whose object is to break the law of a friendly foreign country, such as by smuggling whisky into the United States during prohibition, is unenforceable as contrary to public policy.
Facts
Several parties in England entered into a partnership agreement, governed by English law, to ship whisky from Britain to the United States, where its importation was prohibited during the period of prohibition. The venture failed, and one party sued the others on the agreement. The defendants argued that the agreement was unenforceable because its object was to break the law of the United States.
Legal principle
The Court of Appeal held that the agreement was unenforceable. Lawrence LJ said that an English contract should and will be held invalid on account of illegality if the real object and intention of the parties necessitates them joining in an endeavour to perform in a foreign and friendly country some act which is illegal by the law of such country, notwithstanding the fact that there may be an alternative mode of performance which would not be illegal. To enforce such a contract would be contrary to public policy, because of the duty of international comity owed to friendly states. The principle was applied by the House of Lords in Regazzoni v KC Sethia.
Related cases on choice of law in contract and tort
- Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984] AC 50
- Boys v Chaplin [1971] AC 356
- Cox v Ergo Versicherung AG [2014] UKSC 22, [2014] AC 1379
- Harding v Wealands [2006] UKHL 32, [2007] 2 AC 1
- Ingmar GB Ltd v Eaton Leonard Technologies Inc Case C-381/98, [2000] ECR I-9305
- Libyan Arab Foreign Bank v Bankers Trust Co [1989] QB 728
- Ralli Brothers v Compañía Naviera Sota y Aznar [1920] 2 KB 287
- Red Sea Insurance Co Ltd v Bouygues SA [1995] 1 AC 190
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