Business Law - Legality

Hey, thanks for joining me for this lecture where we're going to be talking about the final element of a contract legality. So in this session, we're going to explore the concept of legality in contract law, which helps to ensure that contracts are formed for lawful purposes and do not violate any sort of statutes or public policy. Following the element of legality is crucial to ensure the enforceability and validity of contracts. So with that being said, let's go ahead and get started.

First I'm going to start out with the definition. Now legality in the context of contract law refers to the requirement that contracts must be formed for lawful purposes. It means that the terms and objectives of a contract must not violate any sort of state or federal statutes and must be in alignment with public policy. Contracts that are of course illegal or against public policy are deemed void and unenforceable by the courts.

One aspect of legality is contracts that violate state or federal statutes. Now these statutes include laws related to licensing, gambling, drug trafficking, or other illegal activities. Contracts that are formed for illegal purposes are void AB initial, which basically means that they're null and void from the beginning. For example, a contract to sell illegal drugs or engage in illegal gambling would be unenforceable in court.

Another consideration is contracts that contradict public policy. Now public policy refers to the principles and values that are considered fundamental to the welfare and well-being of society. Contracts that go against these principles are unenforceable. Examples of agreements contrary to public policy include contracts to commit a crime, contracts to promote fraud or deception, or contracts that restrict personal freedoms.

These will refuse to enforce such agreements. The effects of entering into illegal agreement can be very significant. Firstly, illegal contracts are voidable, meaning that they have no legal effect from the beginning. Neither party can enforce the terms or seek remedies through the court system.

Secondly, in some cases, engaging in illegal agreements may result in legal consequences, such as fines, maybe even criminal charges. The law certainly aims to discourage illegal behavior and protect the integrity of contracts. While the general rule is that illegal contracts are void, there are a few exceptions recognized by the courts. Now, I will emphasize that these are certainly exceptions and obviously not the norm.

These exceptions can include situations where one party is protected by law, such as a party who is unaware of the illegal nature of the contract or maybe who is victim of fraud. Additionally, if a contract can be partially performed without violating the law, the court may enforce that portion of the contract that is legal and sever the illegal portion. Now the element of legality is crucial as it upholds the principles of lawfulness and fairness in contractual relationships. It helps to ensure that parties cannot enter into agreements that promote illegal activities or undermine public policy.

By upholding the requirements of legality, the legal system safeguards the integrity of contracts and helps to maintain societal order. In conclusion, legality is the final element of a contract that ensures the contract is formed for lawful purposes and in accordance with public policy. Contracts that violate state or federal statutes or contradict public policy are considered void and unenforceable. So by understanding the element of legality, we can help to ensure that contracts that we create are both valid and enforceable.

Thank you for joining me for this lecture. I hope you found it to be both educational and helpful and we'll see you next time.