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Legality

I’m lawyer Steve. Lets look at Legality issues in contracts!. 2.01 Understanding Contract Law. Legality . Let’s look at illegal contracts!. Civil & Criminal Agreements to commit a crime/tort are illegal Usury State sets a max interest rate

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Legality

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  1. I’m lawyer Steve. Lets look at Legality issues in contracts! 2.01 Understanding Contract Law Legality

  2. Let’s look at illegal contracts! • Civil & Criminal • Agreements to commit a crime/tort are illegal • Usury • State sets a max interest rate • Interest – fee the borrower pays to the lender for using the money • Usury - charging too high of an interest rate • Gambling • Legal gambling varies from state to state • Licensing • States require that persons in certain occupations obtain a license to practice that occupation • Doctors, plumbers, barbers, lawyers, funeral directors

  3. Time to look how illegal contracts deal with Public Policy • Public policy • Agreements that unreasonably restrain trade • Takes away the ability to do business with others • Agreements not to compete • Restrictive covenant - agreement not to compete in a region for a period of time • Only legal for a short period of time and small geographic region • Agreements for price fixing • Price Fixing - competitors agree on certain price ranges within which they will sell their products

  4. Public policy (continued) • Agreements to eliminate competitive bidding (or bid rigging) • Bid - offer to buy or sell goods or services at a stated price • Bid rigging – competitors agree that one bidder will have low bid for a certain job….low bidder sets bid higher than would if real competition • Agreements to obstruct justice • Anything that delays or prevents justice • Agreements to induce breach of duty or fraud • Influencing persons who hold positions of high trust for private gain • Agreements to interfere with marriage • Damage, destroy, or discourage good family relationships Public Policy Continued

  5. Statute of Frauds • Requires that certain contracts be in writing to be enforceable • Contracts to buy and sell goods for a price of $500 or more • Contracts to buy and sell real property • Contracts that require more than one year to complete • Promises to pay the debt of another • Promises to give something of value in return for marriage

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