ILLEGAL BARGAINS with exculpatory_1

ILLEGAL BARGAINS with exculpatory_1 - ILLEGAL BARGAINS...

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ILLEGAL BARGAINS
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Illegal Bargains Illegal “bargains” rather than “contracts” because legality is a requirement of a valid contract Broader than illegal in the sense of violating a criminal statute Could also be Induced by illegal means Performance violates civil statute Performance constitutes a tort Performance violates public policy
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Possible outcomes Both parties culpable - in pari delicto Court will not enforce, will leave parties where it finds them In some circumstances will excise illegal portion Where one party innocent, e.g. unaware that other not licensed Restitution Will focus on three areas - noncompetition agreements, exculpatory clauses and usury
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Noncompetition Agreements General principle of common law - Unreasonable restraint of trade prohibited Tends to eliminate competition, May adversely effects prices May Impair ability to earn livelihood
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Noncompetition Agreements (cont.) Courts will enforce reasonable restraint of trade if: 1. Ancillary to another agreement (restraint of trade cannot be primary purpose) 2. Restraint is necessary to protect a valid interest 3. Restraint is reasonable in scope Time Geography
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Noncompetition Agreements (cont.) Sale of Business (as opposed to
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This note was uploaded on 12/13/2010 for the course LAW 1101 taught by Professor Reed during the Spring '08 term at CUNY Baruch.

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ILLEGAL BARGAINS with exculpatory_1 - ILLEGAL BARGAINS...

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