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Contracts - stuff I miss

Terms in this set (73)

Illegal if violates statute/CL, no need to be a crime
o Unenforceable if consideration/performance is illegal
§ Void if contemplates illegal conduct

o Exceptions to unenforceability
§ Ignorance of illegality - if one party justifiably ignorant facts making K illegal --> can recover if other party had knowledge of illegality
§ Lack illegal purpose - K doesn't involve illegal consideration or perform of act that is illegal, and party sub performed, can recover if -
· 1) unaware of illegal purpose other party intends to make of that performance, OR
· 2) knows about illegal purpose, but doesn't involve grave social harm
§ Divisible contracts - if can be easily separated into legal and illegal parts, can recover on legal parts
§ Licensing violation - when party fail comply with licensing/similar req and prohibited perform act, that party may not enforce if req has reg purpose and public policy for req clearly outweighs interest in enforcing the promise. Consider nature interest protected (health and safety more important than economic) and magnitude of penalty, and whether violation was intentional in doing weighing
· If purpose only to raise revenue, no reg purpose

o Usually parties left where they stand, but modern trend give restitution to less guilty party
§ In pari delictio - parties not equally at fault, less guilty may be able to recover restitution
§ Withdrawal - party who withdraws from illegal K before improper purpose achieved may get restitution for performance rendered when hasn't engaged in serious misconduct
o Note - duty to perform discharged if K becomes illegal after formation