Chapter 9: More Defects

Question 1

Illegal at common law

Answer 1

contracts invalidated for public policy

Question 2

illegal at common law (2 categories)

Answer 2

1. Illegal contracts
   - Here the parties agree to do something which is directly or indirectly against the law
2. Contracts which are merely void
   - These are contracts which the courts believe are against the public interest though they do not involve breaking the law

Question 3

Restraint of trade

Answer 3

estriction on freedom to work for business where/with whom you choose

Question 4

Restraint of trade (3 categories)

Answer 4

1. Contracts of employment
2. Contracts for the sale of a business
3. Solus agreements

Question 5

Contracts of Employment

Answer 5

Employees may be required to give undertakings not to reveal trade secrets or to compete with their employers on leaving their service

• trade secrets
• business connections

Question 6

Contracts for the sale of a business

Answer 6

• Where a business is sold as a going concern the seller may undertake not to set up in competition with the buyer
• They can only be restrained from running a business of exactly the same kind as they are selling

Question 7

Solus agreements

Answer 7

A contract under which one party agrees to deal with only one supplier, etc.

Question 8

Binding Contracts for Minors

Answer 8

Contracts to purchases necessaries
Beneficial contracts of employment
Voidable contracts
- Contracts that create continuing obligations

Question 9

Mentally Impaired

Answer 9

Where the other party knew of impairment - contract is voidable by impaired

Contracts for necessaries-still have to pay reasonable price