What contracts are considered to be contrary to public policy? When trying to answer this question, you would need to examine general principles instead of examining a contract's individual terms.

Contracts Opposed to Public Policy

When a contract is considered to be contrary to public policy, the contract will not be enforceable. General principles are used to determine if a contract opposes public policy, which is why many people find this issue very complicated. When questions of public policy arise, courts must be very careful in their decisions.

An agreement that opposes public policy or law will be void. It is not possible to expressly forbid acts described in the contract, however. The reason that it's hard to define which contracts are contrary to public policy is that applying public policy takes place on a case-by-case basis.

Some general agreements, however, could be considered against public policy, such as:

  • Contracts that would cause injury to the public services.
  • An agreement involving public matters that would corrupt a private citizen.
  • Contracts that will obstruct or pervert justice.
  • Contracts that would promote litigation.

Some acts are not expressly forbidden by law but their nature is so mischievous that they cannot be included in a legal contract.

A contractual condition could be opposed to public policy if the state has an interest in preventing the condition from being performed. The view of contracts that are contrary to public policy has changed over time. For example, a contractual condition that may be upheld today could very well have been opposed to public policy in the past.

In most cases, courts will assist someone who has been harmed by a breach of contract if they can prove that a breach has actually occurred. The exception to this rule is if the contract is contrary to public policy. If the court finds that a contract has violated a law or policy, it will not help the parties to the contract. If a contract encourages an immoral act, such as committing a crime, it will be considered to contradict public policy and will not be upheld.

What Is Public Policy?

The Policy of the Law is another name for public policy. Public policy can be hard for many people to understand, as it has no set legal definition. What is considered public policy can change depending on the time and the needs of the people. Many courts hold a conservative view of public policy, believing that public policy is determined by judicial decisions and laws and not the opinions of people.

Basically, a contract or an act is thought to be contrary to public policy if it results in a breach of law, harms citizens, or causes injury to the state. Broadly, public policy means that courts will occasionally find a contract invalid because it is against the public good.

Normally, the court's role is to enforce contracts, so negating contracts based on public policy is an exception to their traditional function. Only the courts are responsible for interpreting public policy.

Trading With Enemies

When someone conducts trade with enemies of the state, this will always be considered contrary to public policy. Contracts involving trade with enemies are illegal and will not be enforced by the court.

This issue can become complicated, however, if a contract is entered into during a time of peace and then a war occurs. If this happens, usually one of two results will occur. First, the agreement will be suspended until the conflict is over. Second, the contract will be dissolved.

Traffic in Public Office and Ending Prosecution

Another example of an agreement that is against public policy would be an arrangement to obtain a government job or title through corrupt means. Such a contract would be unenforceable. Such a contract is considered to be against public policy because if this practice were allowed, it would increase corruption and cause public services to be inefficient and unreliable.

For example, if you pay a public servant a certain amount of money to retire so that you can take over their job, this agreement would be void. It is also illegal to make an agreement to end criminal prosecution in exchange for a certain amount of money. Once a complaint has been filed, no arrangement to withdraw the complaint for consideration can be made.

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