Legal Subject Matter

Question 1

Legal Subject Matter - gral rule

Answer 1

Not illegal or against public policy

Question 2

Legal Subject Matter - Consequences when illegal or against public policy

Answer 2

Contract is void and unenforceable

Question 3

Legal Subject Matter - Illegal

Answer 3

• Violates law: i.e. contract to commit tort or crimes or perform professional service without license
• If primary purpose not illegal - apply divisible contract

Question 4

Legal Subject Matter - Illegal - “Not in pari delicto” rule

Answer 4

If parts not equally culpable

• less culpable party might be able to enforce contract

Question 5

Legal Subject Matter - Illegal - Subsequent Illegality Rule

Answer 5

• If before acceptance then offer is terminated
• If after acceptance then contract is discharged by impossibility of performance

Question 6

Legal Subject Matter - Illegal - Violation of Public Policy

Answer 6

• Discretional for court to strike offensive part if divisible contract OR to entire contract unenforceable
• Potential application for restrain of trade, non-competition employment agreement, tortious interference, exculpatory clauses, business sale.

Question 7

Legal Subject Matter - Illegal - Violation of Public Policy Non-competition employment agreement

Answer 7

• SC ok if clear mandatory arbitration provision
• It must have compensation (to justify employee’s promise)
• Reasonable SAT: subject, geographical are, duration time of restriction
• For business sale, there is presumption for reasonable non compete

Question 8

Legal Subject Matter - Illegal - Violation of Public Policy - Exculpatory clauses

Answer 8

• Unenforceable when relieving from won N or breach of contract
• i.e. attorney for legal services release from exercise of due care