section 9.2
Post on 30-Dec-2015
61 Views
Preview:
DESCRIPTION
TRANSCRIPT
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
What You’ll Learn
How to explain the legal doctrine of How to explain the legal doctrine of public policy (p. 194)public policy (p. 194)
How to identify agreements that are How to identify agreements that are contrary to public policy (p. 195) contrary to public policy (p. 195)
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
What You’ll Learn
How to identify contracts that involve an How to identify contracts that involve an unreasonable restraint of trade (p. 196)unreasonable restraint of trade (p. 196)
How to explain the nature of a restrictive How to explain the nature of a restrictive covenant (p. 197)covenant (p. 197)
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Why It’s Important
By understanding public policy and By understanding public policy and contracts that are contrary to public policy, contracts that are contrary to public policy, you will be able to avoid common problems you will be able to avoid common problems associated with violations of this important associated with violations of this important legal doctrine.legal doctrine.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Legal Terms
restraint of trade (p. 195)restraint of trade (p. 195)restrictive covenant (p. 197)restrictive covenant (p. 197)price fixing (p. 197)price fixing (p. 197)competitive bidding (p. 197) competitive bidding (p. 197)
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
The Nature of Public PolicyViolations of Public Policy
Agreements that Unreasonably Restrain Trade
Agreements to Obstruct JusticeAgreements Inducing Breach of Duty or
FraudAgreements Interfering with Marriage
Section OutlineSection Outline
Effect of Illegality
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Illegal Contracts Illegal Contracts
A contract may be illegal if it involves A contract may be illegal if it involves an agreement to do something that an agreement to do something that violates statutory law. In addition, a violates statutory law. In addition, a contract may be illegal if it violates contract may be illegal if it violates public policy.public policy.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
9.29.2
Illegal ContractsIllegal Contracts
violate statestatutes
• civil and criminal statutes• usury statutes• gambling statues• Sunday statutes• licensing statutes
• agreements that unreasonably restrain trade
• agreements to obstruct justice• agreements inducing breach of duty or fraud• agreements interfering
with marriage
Illegal contracts thatIllegal contracts that
violate publicpolicy
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Pre-Learning Question Pre-Learning Question
What is public policy?
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
The Nature of Public PolicyThe Nature of Public Policy
Public Policy is a time-honored legal Public Policy is a time-honored legal doctrine. The basis for making public doctrine. The basis for making public policy decisions is the underlying policy decisions is the underlying principle that nobody should get away principle that nobody should get away with doing something that harms the with doing something that harms the public at large.public at large.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Pre-Learning Question Pre-Learning Question
How would some agreements violate public policy?
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Violations of Public Policy Violations of Public Policy
If an activity harms the health, safety, If an activity harms the health, safety, welfare, or morals of the public, that welfare, or morals of the public, that activity violates public policy.activity violates public policy.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Violations of Public Policy Violations of Public Policy
The most common agreements that The most common agreements that violate public policy include:violate public policy include:
Agreements that unreasonably Agreements that unreasonably restrain trade restrain trade contracts not to competecontracts not to compete price fixing agreementsprice fixing agreements agreements to defeat competitive bidding agreements to defeat competitive bidding
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Violations of Public Policy Violations of Public Policy
More common agreements include: More common agreements include:
Agreements to obstruct justiceAgreements to obstruct justiceAgreements inducing breach of duty Agreements inducing breach of duty or fraudor fraudContracts interfering with marriage Contracts interfering with marriage
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements that Unreasonably Agreements that Unreasonably Restrain Trade Restrain Trade
The law protects our rights to make The law protects our rights to make a living and do business in a market a living and do business in a market economy.economy.A restraint of trade is a limitation on A restraint of trade is a limitation on the full exercise of doing business the full exercise of doing business with others.with others.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements that Unreasonably Agreements that Unreasonably Restrain Trade Restrain Trade
Three types of contracts that violate Three types of contracts that violate this rule: this rule: 1.1. Agreements not to competeAgreements not to compete2.2. Price fixingPrice fixing3.3. Agreements to defeat competitive Agreements to defeat competitive
bidding bidding
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Outright Contracts Outright Contracts Not to Compete Not to Compete
When a business owner sells a When a business owner sells a business, sometimes the sales business, sometimes the sales contract will include a provision called contract will include a provision called a a restrictive covenantrestrictive covenant, which is a , which is a promise not to compete.promise not to compete.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Outright Contracts Outright Contracts Not to Compete Not to Compete
This means that the seller of the This means that the seller of the business will not open a competing business will not open a competing business within a certain area for a business within a certain area for a period of time after the sale.period of time after the sale.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Outright Contracts Outright Contracts Not to Compete Not to Compete
The court will uphold such a restriction The court will uphold such a restriction if it is reasonable in time and if it is reasonable in time and geographic location.geographic location.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Outright Contracts Outright Contracts Not to Compete Not to Compete
Promises not to compete are also Promises not to compete are also sometimes found in employment sometimes found in employment contracts. contracts. Such contracts are enforced only as Such contracts are enforced only as necessary to protect the former necessary to protect the former employer from unfair competition.employer from unfair competition.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Price Fixing Price Fixing
Price fixingPrice fixing occurs when occurs when competitors agree on certain price competitors agree on certain price ranges within which they set their ranges within which they set their prices. prices. Price fixing discourages competition Price fixing discourages competition and raises prices.and raises prices.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Are restrictive covenants legal? Why or why not?
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
ANSWERANSWER
Yes, if it is reasonable in time and geographic location.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements to DefeatAgreements to DefeatCompetitive Bidding Competitive Bidding
A bid is an offer to buy or sell goods or A bid is an offer to buy or sell goods or services at a stated price. Laws often services at a stated price. Laws often require governments to construct public require governments to construct public works or buy goods and services works or buy goods and services through through competitive biddingcompetitive bidding..
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements to DefeatAgreements to DefeatCompetitive Bidding Competitive Bidding
In the process of competitive bidding, In the process of competitive bidding, rivals submit bids for a project. The rivals submit bids for a project. The firm with the lowest qualified bid wins firm with the lowest qualified bid wins the contract. the contract.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements to DefeatAgreements to DefeatCompetitive Bidding Competitive Bidding
If the bidders get together and agree If the bidders get together and agree not to bid lower than a certain price, not to bid lower than a certain price, then they are not bidding fairly. These then they are not bidding fairly. These agreements and contracts are not agreements and contracts are not enforceable. enforceable.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements to Obstruct Justice Agreements to Obstruct Justice
Any contract that interferes with the Any contract that interferes with the administration of justice is illegal. administration of justice is illegal. Such agreements include:Such agreements include:
Protecting someone from arrestProtecting someone from arrestEncouraging lawsuits Encouraging lawsuits Giving false testimonyGiving false testimonyBribing a juror Bribing a juror
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements Inducing Agreements Inducing Breach of Duty or Fraud Breach of Duty or Fraud
Congressional and state Congressional and state representatives and all other public representatives and all other public officials hold positions of trust. officials hold positions of trust.
These officials owe a duty to work for These officials owe a duty to work for the best interest of the public.the best interest of the public.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements Inducing Agreements Inducing Breach of Duty or Fraud Breach of Duty or Fraud
Any contract that tries to influence the Any contract that tries to influence the representatives to use their positions representatives to use their positions for private gain is unenforceable. for private gain is unenforceable.
This rule also applies to private This rule also applies to private persons who are in positions of trust.persons who are in positions of trust.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements Interfering Agreements Interfering with Marriage with Marriage
The law encourages marriages and The law encourages marriages and protects family relationships. protects family relationships.
Contracts that discourage, harm, or Contracts that discourage, harm, or interfere with good family relationships interfere with good family relationships are illegal and unenforceable in court.are illegal and unenforceable in court.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Agreements Interfering Agreements Interfering with Marriage with Marriage
For example, a contract promising For example, a contract promising money in exchange for not marrying money in exchange for not marrying would be void.would be void.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Pre-Learning Question Pre-Learning Question
How does the illegality of a contract affect the parties to that contract?
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Effect of Illegality Effect of Illegality
In general, a court will not aid either In general, a court will not aid either party to an illegal contract. party to an illegal contract. Neither party can enforce the Neither party can enforce the agreement.agreement.Nor can they receive aid from the Nor can they receive aid from the court. court.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
1. What is the legal doctrine of public policy?
Section 9.2 Assessment
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
No one should be permitted to do anything that harms the public at large.
Section 9.2 Assessment
Answer
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
2. What contracts are considered to be agreements that are contrary to public policy?
Section 9.2 Assessment
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
Agreements that involve an unreasonable restraint of trade, agreements to obstruct justice, agreements inducing fraud or breach of duty; and contracts interfering with marriage.
Section 9.2 Assessment
Answer
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
3. What types of contracts involve an unreasonable restraint of trade?
Section 9.2 Assessment
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
Contracts not to compete, price fixing, and agreements to defeat competitive bidding.
Section 9.2 Assessment
Answer
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
4. What is a restrictive covenant?
Section 9.2 Assessment
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Reviewing What You Learned
Agreement by the seller of a business not to open a competing business within a certain geographic area for a certain period of time.
Section 9.2 Assessment
Answer
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Section 9.2 Assessment
Critical Thinking ActivityPhilosophy of Law What is the legal philosophy behind public policy?
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Section 9.2 Assessment
Critical Thinking Activity AnswerPhilosophy of Law The belief that no one should be permitted to do anything that harms the public at large.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Section 9.2 Assessment
Legal Skills in ActionRestrictive Employment Covenants Your Uncle Larry has just been offered a job at a computer software company.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Section 9.2 Assessment
Legal Skills in ActionRestrictive Employment Covenants His employer asked him to sign a restrictive covenant that would not permit him to work for another software company located anywhere in the United States for the next seven years.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Section 9.2 Assessment
Legal Skills in ActionRestrictive Employment Covenants Write a letter to your uncle telling him whether this restrictive employment covenant would be upheld in court.
Understanding Business and Personal Law
Agreements Contrary to Agreements Contrary to Public Policy Public Policy
Section 9.2Section 9.2
Legality
Section 9.2 Assessment
Legal Skills in Action AnswerRestrictive Employment Covenants Answers will vary, but should address whether the geographic region and time periods specified would be considered reasonable.
top related