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Legality in business law
 

Legality in business law

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Legality in business law

Legality in business law

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    Legality in business law Legality in business law Presentation Transcript

    • Legality CHAPTER 13
    • Quote of the Day
      • “ Gambling is the child of avarice, the brother of iniquity, and the father of mischief .”
      • George Washington,
      • United States President
    • Contracts that May Violate a Statute
      • Wagers
        • Investments
        • Insurance
      • Licensing Statutes
      • Usury
      These types of contracts will be discussed further on the next slides.
    • Wagers
      • A gambling contract is illegal unless it is specifically authorized by state statute.
      • In some cases, wagers have been disguised as “investments” where the gambler places a bet on the price of stock, but never actually buys the stock.
      • Someone taking out a policy on the life of another must have an insurable interest in that person -- or else it becomes a “wager” on their life.
    • Licensing Statutes
      • When a licensing requirement protects the public, any contract made by 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.
      Usury Usury laws prohibit charging excess interest on loans.
    • Contracts that May Violate Public Policy
      • Restraint of Trade
      • Exculpatory Clauses
      • Bailment Cases
      • Unconscionable Contracts
      • Adhesion Contracts
      These types of contracts will be discussed further on the next slides.
    • Restraint of Trade
      • To be valid, an agreement not to compete must be ancillary to a legitimate bargain.
      • Sale of a Business
        • When a noncompete agreement is ancillary to the sale of a business, it is enforceable if reasonable in time, geographic area, and scope of activity.
      • Employment
    • Exculpatory Clauses
      • Generally enforceable when
        • the affected activity is in the public interest, such as medical care, public transportation, or some essential service.
      • Generally unenforceable when
        • it attempts to exclude an intentional tort or gross negligence.
        • the parties have generally unequal bargaining power.
        • it is not clearly written and readily visible.
      Part of a contract that attempts to release you from liability for injury to another party.
    • Bailment Cases
      • Bailment means giving possession and control of personal property to another person.
      • The person giving up possession is the bailor , and the one accepting possession is the bailee .
    • Unconscionable Contracts
      • An unconscionable contract is one that a court refuses to enforce because of fundamental unfairness.
      • The two factors that most often led a court to find unconscionability were:
        • oppression -- meaning that one party used its superior power to force a contract on the weaker party; and
        • surprise --meaning that the weaker party did not fully understand the consequences of its agreement.
    • Adhesion Contracts
      • Adhesion contracts are standard form contracts prepared by one party and given to the other on a “take it or leave it” basis.
      • They are generally enforced when the two parties are of equal power, but when the parties are unequal, the contract may be ruled unconscionable.
    • “ No matter how profitable a particular contract clause may appear to be, it is worthless if it is illegal. Make sure your agreement is lawful.”