Business Law 11.2

requirement for enforceable contract, usual for individuals and business

have illegal objects, void and unenforceable

violate statutes, illegal, void, unenforceable

set the upper limit on annual interest rate that can be charged on certain types of loans by certain lenders, charge higher; illegal

prohibit or limit the carrying on of certain secular activities on Sundays; if done, contract illegal

illegal, unenforaceable

contracts that violate public policy are illegal, void, and unenforceable. if contract commisions immoral act, illegal

make certain types of gambling illegal

an illegal contract is void, therefore, the parties cannot sue for nonperformance

• contracts in restraint of trade
• licensing statutes; regulatory and revenue-raising
• exculpatory clauses
• covenants not to compete

contracts that restraint trade are illegal contracts

enacted to protect public. unlicensed cannot recover payment

enacted to raise money for the govmt. unlicensed can enforce contracts and recover for rendering services

contract clauses that relieve one or both parties from tort liability for ordinary negligence. illegal if affect public policy, reult from superior bargaining power, attempt releive intentional torts, fraud, recklessness, or gross negligence

illegal if unreasonable in line of business, geographic area, or time

oppressively unfair or unjust to shock the conscious of the court. (contracts of adhesion)

• 1. parties posessed severely unequal bargaining power
• 2. dominant party unreasonably used its power to obtain unfair contract terms
• 3. adhering party had no reasonable alternative

• 1. refuse to enforce contract
• 2. refuse to enfore inconscionable clause
• 3. limit the applicability of any unconscionable clause so as to avoid any unconscionable result