Agreement Against Public Policy: Understanding the Basics
Agreements are an essential part of any business transaction. They provide a framework for all parties involved to understand their roles, responsibilities, and expectations. However, not all agreements are legal or enforceable. One type of agreement that falls into this category is an agreement against public policy.
What is an agreement against public policy?
An agreement against public policy is an agreement that contradicts the law, public order, or morality. In simple terms, it is an agreement that goes against the general good of society. Such agreements are considered void, and the courts do not enforce them.
A common example of an agreement against public policy is an agreement to commit a crime. Any agreement that involves an illegal act is against public policy and therefore unenforceable. Other examples of agreements against public policy include agreements that seek to restrict trade or create a monopoly.
Why are agreements against public policy unenforceable?
Agreements against public policy are unenforceable for several reasons. First, they are contrary to the public interest. Society has an interest in maintaining law and order, ensuring fair competition, and protecting individual rights. Agreements that go against these interests are not recognized by the courts.
Second, agreements against public policy encourage illegal and immoral behavior. If people were allowed to enter into agreements that violate the law or public order, it would undermine the entire legal system. The courts cannot condone such behavior.
Finally, agreements against public policy lack mutuality, which is an essential element of any contract. A contract is a meeting of the minds between two or more parties who come together to create a legally binding agreement. If one party agrees to something that is against the law or public policy, the agreement is not mutual, and therefore not enforceable.
What are the consequences of entering into an agreement against public policy?
Entering into an agreement against public policy can have serious consequences. Since such agreements are void, neither party can enforce them in court. This means that any money paid or property exchanged pursuant to the agreement cannot be recovered. In addition, if one party breaches the agreement, the other party cannot sue for damages.
Moreover, entering into an agreement against public policy can result in criminal liability. If the agreement involves a criminal act, both parties can be prosecuted. Even if the agreement is not criminal, it can still result in civil liability if it causes harm to a third party.
Conclusion
Agreements against public policy are illegal and unenforceable. Such agreements go against the general good of society and encourage illegal and immoral behavior. Any agreement that involves an illegal act or violates public order or morality is void from the outset. It is important for business owners and individuals to understand the basics of agreements against public policy to avoid entering into such agreements.