Contracts against Public Policy Examples

Contracts are the backbone of business deals, but not all contracts are enforceable. There are times when a contract may be voided because it goes against public policy. Public policy refers to the moral and ethical principles that are of fundamental importance to the community. In this article, we will explore some examples of contracts against public policy.

1. Contracts that promote illegal activities – A contract that entices one party to engage in an illegal activity goes against public policy. For example, a contract between two parties to sell drugs or to engage in prostitution is against the law and cannot be enforced.

2. Contracts that limit the rights of employees – An employment contract that limits the right of an employee to work for a competitor after leaving the company may be considered against public policy. Such a contract could prevent employees from finding suitable employment, which is not in the best interest of the community.

3. Contracts that waive liability for negligence – If a contract attempts to waive liability for negligence, it may be considered against public policy as it could lead to the harm of innocent parties. For example, a contract that waives the liability of a hospital in case of medical malpractice is unenforceable.

4. Contracts that restrain trade – Contracts that restrain trade, such as monopoly agreements, price fixing agreements, or exclusive distribution agreements, are against public policy. Such contracts can harm competition and limit consumer choice.

5. Contracts that involve bribery – Any contract that involves bribery is against public policy. For example, a contract that involves bribing a public official to win a contract is unenforceable.

6. Contracts that violate environmental laws – Contracts that involve activities that violate environmental laws are considered against public policy. For instance, a contract to dump toxic waste could harm the environment and the health of the community.

In conclusion, contracts that go against public policy are unenforceable. It is essential to have a thorough understanding of the laws and the moral values of the community to avoid entering a contract that violates public policy. As a business owner or entrepreneur, it is crucial to consult with an experienced attorney familiar with the laws and regulations before entering into any contract to ensure it is enforceable and does not violate public policy.

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