contract_slides_for_web_07_part_2_Presentation

contract_slides_for_web_07_part_2_Presentation - Contract...

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Contract Illegality Effect of illegality What is illegal Contract provisions that violate statues Contract provisions that violate public policy
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Effect of illegality General rule: contract void Exceptions [would be voidable ] where statute protects a party where party induced by fraud, duress or undue influence where party withdrew before performance where party unaware of facts that make contract illegal
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Contracts Against Public Policy Who decides what violates public policy? See Diosdado v. Diosdado
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Usury Charging more than the permissible rate of interest Legal or contract rate Criminal usury Effect of usury
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Gambling contracts General rule : if a “wager or lottery” the contract is void. Exceptions : Allow intervention to return party to status quo -- see N.Y. Gen. Ob. L.§5-419. Statute allows for some gambling activity like NY State Lottery or bingo by charity
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Contracts Violating Licensing Statutes If the person doesn’t have the required license, is a contract with that person enforceable? Look to statute. Look to purpose of license. Protect public – void. Raise revenue – enforceable but may be a sanction. See Pacific Custom Pools v. Turner Construction Co. , Case 13-1, text at 231
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Contract in restraint of trade General rule : contract in restraint of trade is contrary to public policy. May violate statutes like antitrust laws.
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Reasonable restraint of trade Restriction necessary to protect contract rights Reasonable time or geographic limitation Does not injure public or violate public policy Consideration received for signing See Earthweb, Inc. v. Schlack , Case 13-2, text at 232
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Exculpatory Clauses Release or waiver of liability Public policy concerns will dictate whether enforceable See Henrioulle v. Marin Ventures , Case 13-3, text at 234 See NY Gen Ob L §§5-321 to 5-326 What liability can be waived? Is there a knowing waiver? Negligence v. gross negligence/willful misconduct See Manning v. Brannon
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Minority General rule : For contracts, a person under 18 may enter into any contract that an adult can [unless it violates a statute]. In order to disaffirm, a minor need only manifest an intention not to be bound.
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Minority, con’t Minor must disaffirm while a minor or within a reasonable time thereafter. See In re The Score Board, Inc. , Case 14-2, text at 245 Must return goods still in possession. What, if any damages is the minor responsible for? Malicious/intentional damages Some states impose a duty of restitution See Dodson v. Shrader , Case 14-1, text at 243 Is disaffirmance effective as to a third party?
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Minor CANNOT disaffirm In New York [but may be different elsewhere]: Contract in connection with business Contract of married couple regarding home Contract for medical care of minor or minor’s child Contract made by parent on minor’s behalf if
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This note was uploaded on 02/20/2009 for the course AEM 3200 taught by Professor Grossman,d. during the Fall '07 term at Cornell.

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contract_slides_for_web_07_part_2_Presentation - Contract...

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