What is the effect of illegality on a contract? Which of the following is correct?

A contract if breached by one of the parties, then becomes an illegal agreement and is unenforceable

A contract may be illegal and therefore void, or the agreement may become illegal due to a change in law or circumstances and consequently void and discharged

Illegal contracts are possible, while they may not be enforced, they are still valid and not discharged once they become illegal

If a contract was a legal one, before legislation was introduced to make the subject matter illegal, then the agreement remains valid and is not discharged