MOR 215: Chapter 10

Contracts Obstructing the Administration of Justice

1. an agreement to pay a witness a larger fee than that allowed by law, provided the promisor wins the case; (2)an agreement by a candidate for sheriff that a certain individual will be appointed deputy sheriff in return for aid in bringing about the promisor's election; (3)an agreement to pay a prospective witness a sum of money to leave the state until the trial is over; and (4)an agreement not to prosecute a thief if the stolen goods are returned.

Jerry and Nancy bet $250 on a basketball game between the New York Knicks and the Boston Celtics. Both Jerry and Nancy hand over their bet money to Cameron, who will act as a stakeholder in this bet. Which of the following is true of this scenario

In general, the courts will leave the parties to a private gambling contract where it finds them and will not allow one party to recover damages from the other for the breach of a gambling debt. In this scenario, if Jerry breaches the gambling contract, the courts will not allow Nancy to recover damages.

Why are noncompete contracts that have restrictions that go further or longer than necessary to protect the buyer of the business unlawful?

It burdens the seller but also because it deprives the business community and society in general of the benefit of the activities of the seller

If Tom contracts to sell cigarettes to Mary and her friends, who are minors, can he recover on the contract? Why not?

No, contract to contrary to public policy are unenforceable

Does a contract that is void for illegality necessarily involve the commission of a crime

No, it may consist of a private wrong (tort). Such as 2 parties to slander a third

If Tom contracts to sell cigarettes to Mary and her friends, who are minors, can he recover on the contract? Why not?

No, it's illegal to sell to minors therefore the contract cannot be recovered

Jeremy is arrested for stealing a computer from a local business. The computer has valuable data saved to the hard drive and, in an attempt to recover the computer, the district attorney contracts with Jeremy not to prosecute him if the computer is returned to its rightful owner.

The contract is void, because it has a tendency to obstruct the administration of justice

Business Equip Inc., was one of the biggest players in the heavy equipment manufacturing market. The company secretly contracted with other large companies in the equipment industry and fixed the prices of turbines. Such contracts are considered:

Void

Ben and Judy Sims purchase West Palm Dry Cleaning, a well-known dry cleaning business, from Sam. As part of the purchase agreement, the Sims include a provision prohibiting Sam from entering the dry cleaning business in the same town for the next year. Is such a contract valid?

Yes, because this contract reasonably restricts Sam's ability to operate as to both the time and place.

Contracts not to compete are normally void, except when:

buying a business or making an employment contract

Whatever tends to injustice, restraint of liberty, restraint of legal right, whatever tends to be the obstruction of justice, a violation of a statute, or the obstruction or perversion of the administration of the law as to executive, legislative, or other official action, whenever embodied in and made subject of the a contract

Contracts to public policy are unenforceable

An agreement to pay a prospective witness a large sum of money to leave the state until a trial is over is null and void, because:

it obstructs the administration of justice

Give three examples of contracts that injure public service

1. Bribery, 2. Using one's influence in obtaining a public contract, obtain pardons and paroles

gambling contract

Agreement in which parties win or lose by chance

Contracts in Unreasonable Restraint of Trade

Any contract, therefore, intended to restrain trade unreasonably is null and void. Contracts not to compete Contracts to limit competition Contracts to fix the resale price Unfair competitive practices

usury

Charging higher rate of interest than the law allows

types of contracts contrary to public policy include

Contracts limiting the freedom of marriage Contracts obstructing the administration of justice Contracts injuring the public service

Which of the following is not an example of a type of contract that is contrary to public policy?

Contracts limiting the freedom of marriage; obstructing the administration of justice; and injuring the public service are all examples of contracts that are contrary to public policy. A contract of an unlicensed operator is not considered contrary to public policy and will often be enforceable, even if the unlicensed operator is subject to fines.

With regard to illegality of a contract, what is the difference between a divisible and an indivisible contract?

Divisible: so that legal parts can be performed separately, the legal parts of the contract are enforceable. Indivisible: the contract cannot be performed except as an entity, one part renders the whole contract invalid

maximum contract rate

Highest legal rate of interest

Void

If the purpose of a contract is unlawful, the contract is:

legal rate

Interest rate applied when no rate is specified

Amy, a licensed pharmacist, sells Edmund a narcotic painkiller without a prescription. If Edmund refuses to pay for the narcotic, which of the following is true?

The court will refrain from protecting either Edmund or Amy.

Contracts Limiting the Freedom of Marriage

The following provisions in contracts have been held to render the contract a nullity: (1)an agreement whereby one party promises never to marry; (2)an agreement to refrain from marrying for a definite period of time (an agreement not to marry during minority, however, is valid); and (3)an agreement not to marry certain named individuals.

Sarah's elderly aunt promises to give Sarah her entire collection of valuable jewelry in exchange for Sarah's promise to never marry her friend Ben.

This contract is void, because it limits the freedom of marriage

Contracts made by an unlicensed person operating in one of the fields or businesses covered by licensing laws are normally held:

Valid: A licensing law may be designed as a revenue measure by requiring payment of a fee for a license, and many of these laws are enacted to protect the public from incompetent operators. Contracts made by an unlicensed person operating in one of the fields or businesses covered by such a law are normally held valid. However, the unlicensed operator may be subject to a fine or imprisonment

What constitutes a usurious contract?

charging higher rate of interest than the law allows

Robinson-Patman Act

it is unlawful to discriminate in price between competing buyers if the goods are of like grade, quantity, and quality.

Why are most statutes making it illegal to operate certain types of businesses or professions without a license enacted?

protect the public from incompetent operators

Why is it that the types of transactions one observes being undertaken on Sunday do not necessarily indicate restrictions imposed by Sunday acts?

selling liquor, seldom prosecuted, do not necessarily indicate restrictions imposed by these laws

Contracts contrary to public policy are

unenforceable.

Car Title Loan Co. lends money to Bob at an interest rate of 25%, well above the maximum contract rate. This is an example of a(n):

usurious contract.