Illegal Bargains Flashcards
Require formal authorization to engage in certain trades, professions, or businesses
Licensing Statutes
Prohibit wagers, which are agreements that one party will win and the other lose depending upon the outcome of an event in which their only interest is the gain or loss
Gambling Statutes
Establish a maximum rate of interest
Usury Statutes
Prohibition of certain types of commercial activity on Sunday (also called Blue Laws)
Sunday Statutes
Unreasonable restraints of trade are not enforceable
Restraint of Trade
The promise by the seller of a business not to compete in that particular business in a reasonable geographic area for a reasonable period of time is enforceable
Sale of a Business
An employment contract prohibiting an employee from competing with his employer for a reasonable period following termination is enforceable provided the restriction is necessary to protect legitimate interests of the employer
Employment Contracts
The courts generally disapprove of contractual provisions excusing a party from liability for her own tortious conduct
Exculpatory Clauses
Unfair or unduly harsh agreements are not enforceable
Unconscionable Contracts
Unfair or irregular bargaining
Procedural Unconscionability
Oppressive or grossly unfair contractual terms
Substantive Unconscionability
An agreement that requires a person to commit a tort is unenforceable
Tortious Conduct
Neither party may recover under an illegal agreement where both parties are in pari delicto (in equal fault)
Unenforceability
- Party Withdrawing before Performance
- Party Protected by Statute
- Party Not Equally at Fault
- Excusable Ignorance
- Partial Illegality
Illegal Contract Exceptions
