A fundamental rule of contract regulation is that “illegal” contracts are not enforceable. But what constitutes an “illegal contract”? Generally talking, an illegal agreement is one where by the effectiveness of the deal success in an illegal act. Unlawful contracts are viewed as “void and unenforceable,” meaning neither celebration can sue the other social gathering for nonperformance of the deal.
What if a tenant enters into a industrial lease that contemplates unlawful activities by the tenant on the house? This is the scenario for quite a few tenants who are leasing house for hashish operations. In many instances, the action may well be thoroughly accredited and permitted less than state recreational cannabis rules, but the action is unlawful under federal law (these as the Controlled Substances Act). A recent Arizona Courtroom of Appeals scenario tackled this issue immediately.