Illegality - Bussiness Law - Lecture Slides, Slides of Commercial Law

Download Illegality - Bussiness Law - Lecture Slides and more Slides Commercial Law in PDF only on Docsity! ILLEGALITY P A E T R H C 15 “In a free society the state does not administer the affairs of men [and women]. It administers justice among men [and women] who conduct their own affairs.” Walter Lippman Docsity.com CONTRACT LAW • Introduction to Contracts • The Agreement: Offer • The Agreement: Acceptance • Consideration • Reality of Consent • Capacity to Contract • Illegality • Writing • Rights of Third Parties • Performance & Remedies Docsity.com • An illegal agreement involves an act or promise that violates a law or is against public policy – even if there was voluntary consent between two parties – not necessarily criminal ILLEGALITY DEFINITION Docsity.com THREE CATEGORIES • 1. AGREEMENTS THAT VIOLATE STATUTES • 2. AGREEMENTS THAT VIOLATE PUBLIC POLICY PER THE COURTS • 3. UNCONSCIONABLE CONTRACTS Docsity.com AGREEMENTS THAT VIOLATE STATUTE: TWO WAYS • 1. STATUTE DECLARES AGREEMENT ILLEGAL • 2. AGREEMENT FRUSTRATES PURPOSE (POLICY) OF THE STATUTE – COMMIT CRIME – PROMOTE VIOLATION (factors: importance of policy, extent of interference, seriousness of wrongdoing, connection to agreement) i.e. Straub v. BMT – PERFORM ACT WHERE PARTY IS NOT LICENSED (depends on if “regulatory” versus “revenue”) i.e. Riggs v. Woman v. Woman PC Docsity.com EXCULPATORY CLAUSES • 1. NOT VALID IF BEYOND NEGLIGENCE • 2. NOT IF PUBLIC DUTY • 3. NOT VALID IF NON-DELEGABLE PER COMMON LAW OR STATUTE i.e. McCune v. Myrtle Beach Indoor Shooting Range Docsity.com UNCONSCIONABILITY • PROCEDURAL = bargaining process  economic need  lack of time  market conditions • SUBSTANTIVE = terms so unfair that they shock the conscience  deprived of remedy  price excessive to market  one party bears disproportionate amount of risk Docsity.com EFFECT OF ILLEGALITY: VOID • LEAVE PARTIES WHERE IT FINDS THEM • EXCEPTIONS: – 1. EXCUSABLE IGNORANCE OF FACTS OR LAW – 2. NOT IN PARI DELICTO – 3. RESCISSION BEFORE PERFORMANCE – 4. DIVISIBLE CONTRACT Docsity.com