Gambling contract
Agreement in which parties lose or win by chance
Usury
charging higher rate of interest than the law allows
maximum contract rate
higher legal rate of interest
legal rate
interest rate applied when no rate is specified
Maximum contract rate
the highest legal rate of interest.
Usurious
exceeding the maximum rate of interest which may be charged on loans.
Unlawful contracts
A contract must be for a lawful purpose, which must be achieved in a
lawful manner. Otherwise, the contract is void.
Contracts prohibited by statue
Gambling contracts Sunday contracts Usurious
contracts Contracts of an unlicensed operator
Contracts for the sale of prohibited articles Contracts
in unreasonable restraint of trade
If the purpose of a contract is unlawful, the contract is:
void
A contract that sets an illegally high interest rate that may be
charged for the use of money is called a usurious contract. State laws
that limit the rate of interest that may be charged for the use of
money are called usury laws. Review the section �Contracts Prohibited
By Statute� in Chapter 10.
usurious contract
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. Review the section
�Contracts Prohibited By Statute� in Chapter 10.
valid
Contracts contrary to public policy are unenforceable. The courts
must determine from the nature of the contract whether or not it is
contrary to public policy. Review the section �Contracts 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. Review the section �Contracts Contrary To Public
Policy� in Chapter 10.
.
Any contract that may obstruct our legal process is null and void. It
is not necessary that justice actually be obstructed. If the contract
has the tendency to do so, the courts will not enforce it. An
agreement to pay a prospective witness to leave the state until a
trial is over would have a tendency to obstruct the administration of
justice and would not be enforceable. Review the section �Contracts
Contrary To Public Policy� in Chapter 10.
.
Normally a contract not to compete is illegal. However, it can be
valid when buying a business or making an employment contract. When
one buys a going business, it is customary to prohibit the seller from
entering the same business again in the same territory for a period of
time. Review the section �Contracts Prohibited by Statute� in Chapter 10.
...