Question

In: Finance

Dyna tell Ed that she will pay him $1,000 to set fire to her store so...

Dyna tell Ed that she will pay him $1,000 to set fire to her store so she can collect under a fire insurance policy. Ed sets fire to the store and Dyna refuses to pay. Ed sues Dyna. Does Ed win. Please explain why or why not.  

Solutions

Expert Solution

Illegal agreements are those agreements which will not be enforced by any of the parties in court of law because the purpose of the agreement is to achieve an illegal end & these illegal end must visit from performance of contract, so this will be non enforceable contract because these are are illegal in nature.

(I am assuming that Ed is aware about the illegal nature of the contract and he has entered into the contract in order to make just the money)

In this case, it can be seen that Diana has entered into an illegal contract for setting her store into fire so she can claim fire insurance policy so, he has performed his part of performance in the contract and Diana has refused to pay but the court of laws will not permit these kind of contract as they have an illegal element associated with them, so even after Ed is suing, it is not enforceable in the court of law and Ed will not be winning because this is an illegal contract which is not enforceable in the court of law.


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