Illegal Contracts
Illegal Contractual Terms and Restraints of Trade in Contracts
When dealing with contract law, many problems can arise. There can be illegal terms in the contract or it can just be void. There are restraints on trade which include limiting employees from competing against their employers post employment and so on. Throughout this essay, these restrictions will be analyzed. The difference between illegalities, voids and restraints will be presented, along with cases to provide examples. It must be known that there is a difference between void contracts and illegal contracts. A void contract is not even considered a contract, as it is unable to be enforced by law. In the event that a contract is not only void but illegal, the courts will refuse to help a party who purposely agreed to an illegal arrangement. (Smyth, 2007) There will be no suing for any promised money, or the return of previously transferred property. It is known that when both parties have the knowledge of the illegalities, the court will not assist either of them. This leaves the defendant in a stronger position, as the plaintiff has no assistance. (Smyth, 2007) When one thinks of specifications in a contract, they think that the contract’s conditions are final in terms of the employees’ actions in the future. However, this is false. There are three clauses: the restraint of trade agreement, the non-competition clause and the restrictive covenant. (Ball, 2008) The purpose of these clauses is to restrict employees from being able to work for a company in the same industry as their employer. It is important that employers be aware that there is a lot of skill needed to create an enforceable restraint on post-employment positions. (Ball, 2008) As mentioned above, a major issue that arises within contracts is restraints of trade. It is important to know what restraints of trade means before going into further detail of how they relate to illegalities in contracts. A
When dealing with contract law, many problems can arise. There can be illegal terms in the contract or it can just be void. There are restraints on trade which include limiting employees from competing against their employers post employment and so on. Throughout this essay, these restrictions will be analyzed. The difference between illegalities, voids and restraints will be presented, along with cases to provide examples. It must be known that there is a difference between void contracts and illegal contracts. A void contract is not even considered a contract, as it is unable to be enforced by law. In the event that a contract is not only void but illegal, the courts will refuse to help a party who purposely agreed to an illegal arrangement. (Smyth, 2007) There will be no suing for any promised money, or the return of previously transferred property. It is known that when both parties have the knowledge of the illegalities, the court will not assist either of them. This leaves the defendant in a stronger position, as the plaintiff has no assistance. (Smyth, 2007) When one thinks of specifications in a contract, they think that the contract’s conditions are final in terms of the employees’ actions in the future. However, this is false. There are three clauses: the restraint of trade agreement, the non-competition clause and the restrictive covenant. (Ball, 2008) The purpose of these clauses is to restrict employees from being able to work for a company in the same industry as their employer. It is important that employers be aware that there is a lot of skill needed to create an enforceable restraint on post-employment positions. (Ball, 2008) As mentioned above, a major issue that arises within contracts is restraints of trade. It is important to know what restraints of trade means before going into further detail of how they relate to illegalities in contracts. A
Bibliography: Duhaime, Lloyd. "Interpretation of Contracts." Duhaime. 2008. 26 Mar. 20 http://www.duhaime.org/LegalResources/ArticleAdmin/tabid/350/articleType/ ArticleView/articleId/92/Part-7-Interpretation-of-Contracts.aspx. "Lyons V. Multari, 2000." (2000). Canlii. 01 Apr. 2008. Apr. 2008. 24 Mar. 2008 http://www.eepublishers.co.za/view.php?sid=8175. "Term: Illegal Contracts." Gillhams Solicitors. 2008. Gillhams. 29 Mar. 2008 http://www.gillhams.com/dictionary/442.cfm.