BLAW 2301 Lecture Notes - Lecture 14: Non-Compete Clause, Bailment, Inequality Of Bargaining Power
26 Jun 2018
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CH 14: LEGALITY
Contracts that violate a statue:
1)Wages
A gambling contract is illegal UNLESS IT IS SPECIFICALLY AUHTROIZED BY STATE STATUE.
“Void”: really means just that: a court will not intercede to assist either party to an
illegal agreement, even if its refusal leaves one party obviously shortchanged.
U cant wager on credit its illegal in most states however in some states its not. Because
such contracts are legal in that state, the casino is able to obtain a judgment against
a defaulting debtor and—yes—enforce that judgment in the gambler’s home state.
EX: Ryno v. Tyra (1988) – Coin Toss
-Used car salesman ryno and customer tyra says she wants to buy a car. If heads have
the car for free, tails $100k. It was an illegal wager so court will not help ryno or tyra.
2) I nsurance: Anyone taking out a policy on the life of another must have an insurable interest
in that person.
If there is no insurable interest, there is generally no contract
Insurable interest- Meaning there is some financial quantifiable interest. u have to be
influenced by tht person's death.
Other valid interests include creditor-debtor status (the creditor wants payment if the
debtor dies) and business association (an executive in the company is so valuable
that the firm will need compensation if something happens to him).
For ex ur a shareholder for Apple, Tim Cook ceo dies.
3) Licensing statues : When a licensing requirement is designed to protect the public, any
contract with an unlicensed worker is unenforceable
When a licensing requirement is designed merely to raise revenue, a contract made by
an unlicensed person is generally enforceable
The purpose of the License is not to protect the public. Ex: a fishing license, he has to
pay I've got to give him the fish- contract still Intact.
Ex: Thus, if you open a stationery store and forget to pay the state’s licensing fee, you
can still enforce a contract to buy 10,000 envelopes from a wholesaler at a bargain
price.
4) usury laws
Usury laws prohibit charging excess interest on loans
A lender who charges a usurious rate of interest may forfeit the illegal interest, or all
interest, or, in some states, the entire loan. This penalty determined by the states.
Ex: BUT Payday lenders are exempt from usury laws. They charge ridiculous rates.
And dnt get prohibited becuz some ppl can't walk into bank and get loan cuz of crappy
credit score.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
A gambling contract is illegal unless it is specifically auhtroized by state statue. Void : really means just that: a court will not intercede to assist either party to an illegal agreement, even if its refusal leaves one party obviously shortchanged. U cant wager on credit its illegal in most states however in some states its not. Because such contracts are legal in that state, the casino is able to obtain a judgment against a defaulting debtor and yes enforce that judgment in the gambler"s home state. Ex: ryno v. tyra (1988) coin toss. Used car salesman ryno and customer tyra says she wants to buy a car. If heads have the car for free, tails k. It was an illegal wager so court will not help ryno or tyra: i nsurance: anyone taking out a policy on the life of another must have an insurable interest in that person.
