The law of contracts, seemingly as old as civilization itself, evolved to encourage people to uphold their bargains and to provide a remedy when another party failed to uphold his end of a promise. If I promise to paint your house for $500, and you pay me, you have a right to expect me to perform as promised. Similarly, if I paint the house, I have a right to expect your $500 check. Contract law is designed to support these expectations. If I don’t perform, you can sue me for breach of contract and either recover your $500 (if it has already been paid) plus any additional cost incurred to hire a new painter, or the difference between $500 and what another painter might charge if you have yet to pay me.
While contract law is generally structured to encourage people to keep their promises, some promises cannot be enforced, no matter how much is at stake. Consider:
Illegal Contracts. A contract is illegal if either the formation or performance of the contract are prohibited by law. A rather extreme example is a contract with a “hit man” to inflict bodily harm on another person. This is the type of “contract” the law will not sanction and will not enforce. A less extreme example would be a contract with an unlicensed professional to perform professional services. If you went to a physician who was not licensed to practice medicine and he later sued you for the unpaid value of his services, he would be out of luck (and out of court!). Where one of the parties to the contract cannot lawfully perform the act or result required by the contract, it is unenforceable against the innocent party to the deal.
Agreements in restraint of trade. Contracts which place unreasonable restraints on trade are invalid. For example, an agreement between two competitors to keep the price of tires in a particular geographic area at an artificially high level would be improper and unenforceable. The federal antitrust laws and state fair trade laws declare such “agreements” to be illegal.
Contracts against public policy. Society imposes upon contracting parties the obligation to adhere to certain basic moral tenets. For example, a contract to promote illegal gambling or one which might result in cruelty to animals could never be enforced. (These might also be regarded as illegal contracts.) A contract placing restrictions upon leasing property to members of minority groups would likewise be unenforceable. If the seller of an apartment building insists upon a clause in the sales agreement requiring the buyer to lease apartments only to caucasians, the buyer could safely lease apartments to persons of any race since the law of contracts would not endorse (or enforce) the seller’s improper purpose.
Contracts with minors. In some cases, contracts between an adult and a minor child may not be enforced against the minor and are deemed “voidable” by the minor. Such contracts usually are enforceable by the minor against the adult counterpart to the contract, however. An exception exists where a minor contracts for “necessaries” – things such as food, shelter, clothing, medicine, etc. Such contracts will be binding upon minors in most cases.
Acknowledging there are a few exceptions, a contract usually is a contract and usually will be enforced.
While contract law is generally structured to encourage people to keep their promises, some promises cannot be enforced, no matter how much is at stake. Consider:
Illegal Contracts. A contract is illegal if either the formation or performance of the contract are prohibited by law. A rather extreme example is a contract with a “hit man” to inflict bodily harm on another person. This is the type of “contract” the law will not sanction and will not enforce. A less extreme example would be a contract with an unlicensed professional to perform professional services. If you went to a physician who was not licensed to practice medicine and he later sued you for the unpaid value of his services, he would be out of luck (and out of court!). Where one of the parties to the contract cannot lawfully perform the act or result required by the contract, it is unenforceable against the innocent party to the deal.
Agreements in restraint of trade. Contracts which place unreasonable restraints on trade are invalid. For example, an agreement between two competitors to keep the price of tires in a particular geographic area at an artificially high level would be improper and unenforceable. The federal antitrust laws and state fair trade laws declare such “agreements” to be illegal.
Contracts against public policy. Society imposes upon contracting parties the obligation to adhere to certain basic moral tenets. For example, a contract to promote illegal gambling or one which might result in cruelty to animals could never be enforced. (These might also be regarded as illegal contracts.) A contract placing restrictions upon leasing property to members of minority groups would likewise be unenforceable. If the seller of an apartment building insists upon a clause in the sales agreement requiring the buyer to lease apartments only to caucasians, the buyer could safely lease apartments to persons of any race since the law of contracts would not endorse (or enforce) the seller’s improper purpose.
Contracts with minors. In some cases, contracts between an adult and a minor child may not be enforced against the minor and are deemed “voidable” by the minor. Such contracts usually are enforceable by the minor against the adult counterpart to the contract, however. An exception exists where a minor contracts for “necessaries” – things such as food, shelter, clothing, medicine, etc. Such contracts will be binding upon minors in most cases.
Acknowledging there are a few exceptions, a contract usually is a contract and usually will be enforced.
-Curt Ward