The contract is illegal, which may be due to the illegal purpose of the contract, the illegal way of signing the contract, or the damage to the interests of others, the state, the collective and society. Illegality of the contract will lead to the invalidity of the contract, while the dispute settlement clauses in the contract are not necessarily invalid. According to the Contract Law, the invalidity, cancellation or termination of a contract shall not affect the validity of the independently existing dispute settlement clauses in the contract. There are many reasons for the illegality or invalidity of the contract, and the party at fault may bear the responsibility of returning property and compensating for losses. Therefore, if the contract is invalid due to illegality, both parties can demand the return of property, compensation for discount, compensation for losses, etc. according to the provisions of the Contract Law on the invalidity of the contract and the actual performance of the contract. In addition, if there is a clear agreement on the way to deal with invalid contracts in the contract terms, as long as the agreement does not violate the mandatory provisions of laws and regulations, it can also be dealt with according to the way of dispute resolution in the contract. In addition, the parties to the contract can also negotiate and deal with the problems caused by the illegality or invalidity of the contract in addition to the original contract. If the parties to the contract cannot reach an agreement on the handling of the relevant issues, they can settle them through litigation.
 Article 57 of the Contract Law of the People's Republic of China
 The invalidity, cancellation or termination of a contract shall not affect the validity of the independently existing provisions of the contract relating to dispute settlement.
 Article 58 of the Contract Law of the People's Republic of China
 After the contract is invalid or cancelled, the property acquired as a result of the contract shall be returned. If the property cannot be returned or it is unnecessary to return it, compensation shall be made at a discount. The party at fault shall compensate the other party for the losses it has suffered as a result. If both parties are at fault, they shall bear their respective responsibilities.