After completing this chapter, students will be able to: Explain the concept of illegality as it pertains to contract law, identify illegal agreements and discuss the effect of illegality, analyze effect of non-compete and exculpatory clauses, explain unconscionability. | Contracts Introduction to Contracts The Agreement: Offer The Agreement: Acceptance Consideration Reality of Consent 3 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Contracts Capacity to Contract Illegality Writing Rights of Third Parties Performance & Remedies 3 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Illegality P A E T R H C 15 “In a free society the state does not administer the affairs of men. It administers justice among men who conduct their own affairs.” Walter Lippman Learning Objectives Meaning of illegality Types of illegal agreements Effect on contracts Special doctrines 15 - An agreement will be unenforceable because of illegality if the agreement involves an act or promise that violates a law or is against public policy Even if there was voluntary consent between two parties who have capacity to contract Effect: no remedy for breach of an illegal agreement . | Contracts Introduction to Contracts The Agreement: Offer The Agreement: Acceptance Consideration Reality of Consent 3 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Contracts Capacity to Contract Illegality Writing Rights of Third Parties Performance & Remedies 3 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Illegality P A E T R H C 15 “In a free society the state does not administer the affairs of men. It administers justice among men who conduct their own affairs.” Walter Lippman Learning Objectives Meaning of illegality Types of illegal agreements Effect on contracts Special doctrines 15 - An agreement will be unenforceable because of illegality if the agreement involves an act or promise that violates a law or is against public policy Even if there was voluntary consent between two parties who have capacity to contract Effect: no remedy for breach of an illegal agreement Illegality 15 - Agreements that violate a statute Agreements that violate public policy: Agreements to commit a crime Agreements promoting an illegal purpose Agreement to perform an act for which the person is not properly licensed Example: Riggs v. Woman to Woman . Agreements in restraint of competition Types of Illegal Agreements 15 - Licensing statutes: A common regulatory statute requires a person to obtain a license, permit, or registration before engaging in a certain business or profession If the purpose of the statute is to protect the public against dishonest or incompetent practitioners, then an agreement is unenforceable if an unlicensed person agrees to do an act that requires a license Riggs v. Woman to Woman . Facts & Procedural History: Riggs joined defendant medical practice after assurances that the medical practice was a licensed professional corporation Employment agreement contained a covenant not to compete Riggs discovered that defendant was not a licensed
