CH 15 ILLEGALITY Agreement illegal b c 1 legislature declared type of contract void or 2 violates public policy widely shared view about what ideas institutions promote public welfare developed by courts or manifested in sources of law courts must determine whether importance of public policy degree of interference w policy are sufficient to outweigh interests that favor enforcement of agreement CATEGORIES OF ILLEGAL AGREEMENTS courts refuse to give any remedy for breach of illegal agreement serves the public interest 1 Agreements that violate statutes 1 Agreements declared illegal by statute court only interprets applies statute 2 Agreements that violate public policy of statute no statute specifically states that agreement is illegal agreements to commit a crime agreements that promote violations of statutes unenforceable if person is aware of other s illegal purpose actively helps to accomplish purpose agreements to perform an act for which party isn t properly licensed 1 regulatory protects public from dishonest practitioners unenforceable 2 revenue raising ex licensing fee enforceable 2 Agreements that violate public policy articulated by courts 1 Agreements in restraint of competition ancillary covenant not to compete noncompetition clause agreement not to engage in particular competing activity in specific area time period may include confidentiality nondisclosure nonsolicitation agreements enforced if 1 clause serves legit business purpose 2 restriction reasonable in time area scope 3 doesn t impose undue hardship not enforced for common calling ex salesperson barber 2 Exculpatory clauses release liability waiver releases one person from tort liability can t protect for wrongdoing greater than negligence for party who owes duty to public if contract frustrates purpose of imposing duty in question if clause is unconscionable contract of adhesion must be voluntary knowing consent written clearly conspicuously 3 Agreements that unreasonably interfere with family relationships 3 Contracts of adhesion unconscionable contracts 1 Unconscionability absence of meaningful choice w terms unreasonably advantageous to one party procedural unfairness in bargaining process or substantive unfairness in contract terms Sect 208 Restatement courts refuse to grant equitable remedy of specific performance for breach of contract if contract oppressively unfair options refuse to enforce entire agreement or unconscionable provision limit application of provision 2 Adhesion stronger party determines terms of contract leaves weaker party w no choice but to adhere may be used to define procedural unconscionability usually on standardized form take it or leave it basis void if contains oppressive terms that adhering party couldn t have been expected to have been aware he was agreeing to CH 3 BUSINESS THE CONSTITUTION Constitution sets up structure of gov t keeps gov t from taking certain actions Article I Congress Senate House legislative powers commerce tax spending veto overriding impeachment treaties also II Article II exec power judicial power Articles I II III checks balances III Congress s control over Supr Ct Article V constitutional amendments Article VI federal supremacy Evolution written book law what officials actually do changing social conditions additional interpretations vague terms judicial review cts declare actions of other gov t bodies unconstitutional limits on ct power constitution stare decisis power struggles w more democratically elected bodies ex Congress Constitution limits gov t reg power 1 limits fed by listing powers Congress can exercise enumerated limits state fed by placing indiv checks on each laws must satisfy both conditions to be constit STATE FEDERAL POWER TO REGULATE 1 State some powers limited to Congress others concurrent Congress state ex police power 2 Federal Article I Sect 8 lists powers to regulate interstate commerce expanded to intrastate commerce that affects interstate lay collect taxes raise revenue regulatory device spend for general welfare serve gen interests reasonably related INDEP CHECKS ON FED STATE GOV TS Incorporation Bill of Rights applies to states Equal protection applies to fed Const only applies to gov t action private behavior not gov t action unless regulatory unit of gov t directly responsible coerced encouraged for challenged behavior in situations where private entity exercises powers traditionally reserved to the state Means End Test weigh individual rights against social purposes served by restricting laws ends significance of social purpose in order to restrict right v means how effectively challenged law must promote that purpose to be constitutional tests 1 Rational Basis action has reasonable relation to achievement of legit purpose 2 Intermediate Scrutiny many forms 3 Full Strict Scrutiny action must be necessary to fulfillment of compelling gov t interest FREEDOM OF SPEECH 1st am very strict scrutiny marketplace rationale free competition of ideas is best way of attaining truth 1 Political Noncommercial speech pol speech is core of 1st am noncommercial literary artistic educational ethical full strict scrutiny hard to prove restriction is necessary also applies to corporations speech 2 Commercial speech proposes commercial transaction intermediate scrutiny if lawful nonmisleading no protection if misleading deceptive ad or promotes illegal activity test restriction not unconstitutional if 1 substantial gov t interest underlies restriction 2 restriction directly advances interest 3 restriction no more extensive than necessary to further interest conclusions gov t finding it more difficult to justify comm speech restrictions gap between intermediate full protection becoming smaller DUE PROCESS 5th am fed 1 Procedural traditional conception establishes procedures that gov t must follow to take life liberty property core idea that one is entitled to adequate notice of gov t action to fair trial hearing exceptions exist liberty broadly poorly defined property created by existing rules giving person legit claim to entitlement benefit 2 Substantive set standards of behavior for organized social life courts have struck down legislation denying due process ex max hr labor law rational basis review important device for protecting noneconomic rights ex privacy EQUAL PROTECTION 14th am states local rational basis test for social economic regulations stricter scrutiny used regarding fundamental rights or suspect classes Suspect
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