Chapter 10 - Prohibited contracts

Question 1

Contract is void or avoidable if it violates these 3 principles

Answer 1

1. public policy
2. good morals
3. Mandatory rules

Question 2

3 types of contracts that go against public policy / good morals?

Answer 2

1. Restriction of personal/artistic freedom
2. Restriction of economic freedom - but sometimes permissible if only covers a certain scope ( non-competition clauses)
3. waiver of fundamental rights - restrict fundamental rights (religion, gender, human rights)

Question 3

What is mandatory law?

Answer 3

In all jurisdictions there are statutory provisions that prohibit the the conclusion of certain contracts

Question 4

Good morals and public policy - abstract concepts- what are the positive and the negative aspects of this?

Answer 4

positive - good morals evolve -permits the courts to adjust this
negative - courts may have trouble deciding what public policy or morals are required. Judges can’t imply their standards, must feel out what society as a whole holds as morally unjustifiable

Question 5

What are the 4 effects of a prohibited contract?

Answer 5

1. Avoidability
2. No contractual effect
3. Restitution
4. Motive unknown

Question 6

Explain to me availability?

Answer 6

1. Avoidability - aims to protect one party only - therefore the party which is not protected can decide to continue with the contract

Question 7

Explain to me how no contractual effect can make the contact void?

Answer 7

No contractual effect - prohibition on certain types of contract does not always make that contract not possible. administrative consequences. Liquor ejemplo

Question 8

Explain the concept of motive unknown?

Answer 8

One contractual party may not know the true intentions of the other party. - not knowing about their illegal action. Party can ask for compensation

Question 9

Explain to me restitution?

Answer 9

if contract void or avoidable each party must restitute what it received. BUT restitution in prohibited contracts depends on the degree of fault of each party and the level of violation of the law.

Question 10

how is it called when both parties willingly acted against the law or good morals, and a rule prevails and therefore prevents restitution

Answer 10

In pari delicto

Question 11

Ho