2.01 Understanding Contract Law I’m lawyer Steve. Lets look at Legality issues in contracts!

 Civil & Criminal Agreements to commit a crime/tort are illegal  Usury State sets a max interest rate Interest – fee the borrower pays to the lender for using the money Usury - charging too high of an interest rate  Gambling Legal gambling varies from state to state  Licensing States require that persons in certain occupations obtain a license to practice that occupation ○ Doctors, plumbers, barbers, lawyers, funeral directors Let’s look at illegal contracts!

 Public policy Agreements that unreasonably restrain trade ○ Takes away the ability to do business with others Agreements not to compete ○ Restrictive covenant - agreement not to compete in a region for a period of time ○ Only legal for a short period of time and small geographic region Agreements for price fixing ○ Price Fixing - competitors agree on certain price ranges within which they will sell their products Time to look how illegal contracts deal with Public Policy

 Public policy (continued) Agreements to eliminate competitive bidding (or bid rigging) ○ Bid - offer to buy or sell goods or services at a stated price ○ Bid rigging – competitors agree that one bidder will have low bid for a certain job….low bidder sets bid higher than would if real competition Agreements to obstruct justice ○ Anything that delays or prevents justice Agreements to induce breach of duty or fraud ○ Influencing persons who hold positions of high trust for private gain Agreements to interfere with marriage ○ Damage, destroy, or discourage good family relationships Public Policy Continued

Statute of Frauds  Requires that certain contracts be in writing to be enforceable Contracts to buy and sell goods for a price of $500 or more Contracts to buy and sell real property Contracts that require more than one year to complete Promises to pay the debt of another Promises to give something of value in return for marriage