what is the ruling of a judge ?
what is the strucutre of the whole ruling ?
which elements comes to his core concern ?
what's the logical of his ruling ?
254 Phil whenPart 2 Contracts Figure 13-1 Illegal Agreements Affecting Public Welfare ECTIN Agreements contrary to public policy maninon aly Agreements evading statutes Agreements injuring public service Agreements involving conflicts of interest Agreements obstructing legal process Agreements involving illegal discrimination Wagers and private lotteries (a) THE CONCEPT OF PUBLIC POLICY. (b) AGREEMENTS EVADING STATUTORY Public policy cannot be defined precisely but is loosely described as protection from that which PROTECTION. Statutes frequently confer bene- tends to be injurious to the public or contrary to fits or provide protection. If an agreement is the public good, or which violates any estab- made that deprives a person of such a statutory lished interest of society." Contracts con- benefit, it is generally held that the agreement is demned as contrary to public policy frequently invalid because it is contrary to the public poli- relate to the protection of the public welfare, cy declared by the statute. For example, a state law provides that automobile insurance policies health, or safety; to the protection of the person; and to the protection of recognized social insti- should cover certain persons. A policy provi- tutions. For example, a contract that prohibits sion excluding persons covered by the statuto- marriage under all circumstances or that ry provision is not valid because it is contrary to encourages divorce is generally held invalid as the public policy declared in the statute. The waiver of statutory provisions designed contrary to public policy. Courts are slow and cautious in invalidating a contract on the to protect debtors, creditors, or consumers may ground that it is contrary to public policy be held void as contrary to public policy. because courts recognize that, on the one hand, they are applying a very vague standard and, (c) FEE SPLITTING. It is against public poli- on the other hand, they are restricting the free- cy for a licensed professional to split fees with a dom of the contracting parties to contract freely person who is not a licensed professional. 12 as they choose." For example, Philip Deli Foods placed an order with Paramount 9. Agreements Injuring Public Service Supplies for a large quantity of canned An agreement that tends to interfere with the domestic sardines. It was agreed between them that the labels on the cans would proper performance of the duties of a public describe the sardines as being Norwegian officer-whether legislative, administrative, or sardines so that Philip could resell them at a judicial-is contrary to public policy and void. Thus, an agreement to procure the award of a higher price than domestic sardines. The con- public contract by corrupt means is not enforce- tract was contrary to public policy because it able. Other examples are agreements to sell contemplated defrauding the purchasing public offices, to procure pardons by corrupt public by misleading consumers as to the means, or to pay a public officer more or less true character of the goods. When a statute makes conduct illegal, how than legal fees or salary. Campaign promises to far will that statute reach to affect contracts? give a job to a particular person are contrary to public policy and cannot be enforced,"3 10 O'Hara v Ahigreen, Blumenfeld and Kempster, 537 NE2d 730 (III 1989). 11 Beacon Hill Civic Ass's e Ristorante Toscano, Inc., 662 Need 1015 12 Practice Management, Lid, + Schwartz, 628 NE2d 656 (III App Ct (Mass 1996). 1993). 13 Harris . Johnson, 578 NE2d 1326 (III Ct App 1991).254 Part 2 Contracts Figure 13-1 Illegal Agreements Affecting Public WelfareUN Agreements contrary to public policy Agreements evading statutes Agreements injuring public service Agreements involving conflicts of interest Agreements obstructing legal process Agreements involving illegal discrimination Wagers and private lotteries (a) THE CONCEPT OF PUBLIC POLICY. (b) AGREEMENTS EVADING STATUTORY Public policy cannot be defined precisely but is loosely described as protection from that which PROTECTION. Statutes frequently confer bene- fits or provide protection. If an agreement is tends to be injurious to the public or contrary to the public good, or which violates any estab- made that deprives a person of such a statutory lished interest of society." Contracts con- benefit, it is generally held that the agreement is demned as contrary to public policy frequently invalid because it is contrary to the public poli- relate to the protection of the public welfare, cy declared by the statute. For example, a state law provides that automobile insurance policies health, or safety; to the protection of the person; and to the protection of recognized social insti- should cover certain persons. A policy provi- tutions. For example, a contract that prohibits sion excluding persons covered by the statuto- marriage under all circumstances or that ry provision is not valid because it is contrary to encourages divorce is generally held invalid as the public policy declared in the statute. contrary to public policy, Courts are slow and The waiver of statutory provisions designed cautious in invalidating a contract on the to protect debtors, creditors, or consumers may ground that it is contrary to public policy be held void as contrary to public policy. because courts recognize that, on the one hand, they are applying a very vague standard and, (c) FEE SPLITTING. It is against public poli- on the other hand, they are restricting the free- cy for a licensed professional to split fees with a dom of the contracting parties to contract freely person who is not a licensed professional. 12 as they choose." For example, Philip Deli Foods placed an order with Paramount 9. Agreements Injuring Public Service Supplies for a large quantity of canned An agreement that tends to interfere with the domestic sardines. It was agreed between them that the labels on the cans would proper performance of the duties of a public describe the sardines as being Norwegian officer-whether legislative, administrative, or sardines so that Philip could resell them at a judicial-is contrary to public policy and void. Thus, an agreement to procure the award of a higher price than domestic sardines. The con- public contract by corrupt means is not enforce- tract was contrary to public policy because it able. Other examples are agreements to sell contemplated defrauding the purchasing public by misleading consumers as to the public offices, to procure pardons by corrupt means, or to pay a public officer more or less true character of the goods. When a statute makes conduct illegal, how than legal fees or salary. Campaign promises to give a job to a particular person are contrary to far will that statute reach to affect contracts? public policy and cannot be enforced."3 1989). 10 O'Hara v Andgreen, Blumenfeld and Kempster, 537 NE2d 730 (Ill 1 Beacon Hill Civic Ass'n v Ristorante Toscano, Inc., 662 Ne2d 1015 12 Practice Management, Led, + Schwartz, 628 NE2d 656 (III App Ct 1993). (Mass 1996). 13 Harris . Johnson, 578 NE2d 1326 (III Ct App 1991).Chapter 13 Legality and Public Policy 253 being in contravention of sound public pol- although avoidance of the contract icy is a very delicate and undefined power, imposed a forfeiture on Bovard, he did and...should be exercised only in cases free from doubt."... recover the corporate machinery, the only assets of the business which could be used Before labeling a contract as being contrary to for lawful purposes, i.e., to manufacture public policy, courts must carefully inquire into jewelry. Thus, the forfeiture was significant- the nature of the conduct, the extent of public ly mitigated if not negligible. Finally, there harm which may be involved, and the moral is no special public interest in the enforce- quality of the conduct of the parties in light of ment of this contract, only the general inter- the prevailing standards of the community.... est in preventing a party to a contract from These factors are more comprehensively avoiding a debt. On the other hand, the Restatement fac- set out in the Restatement Second of Con- tors favoring a public policy against tracts section 178: enforcement of this contract are very 1. A promise or other term of an agreement is strong.... The public policy against manu- unenforceable on grounds of public policy if facturing paraphernalia to facilitate the use legislation provides that it is unenforceable of marijuana is strongly implied in the or the interest in its enforcement is clearly statutory prohibition against the posses- outweighed in the circumstances by a public sion, use, etc., of marijuana, a prohibition policy against the enforcement of such which dates back at least to 1929.... terms. Obviously, refusal to enforce the instant 2. In weighing the interest in the enforcement contract will further that public policy not of a term, account is taken of only in the present circumstances but by a. the parties justified expectations, serving notice on manufacturers of drug b. any forfeiture that would result if paraphernalia that they may not resort to enforcement were denied, and the judicial system to protect or advance c. any special public interest in the their business interests. Moreover, it is enforcement of the particular term. immaterial that the business conducted by 3. In weighing a public policy against enforce- American Horse Enterprises was not ment of a term, account is taken of expressly prohibited by law when Bovard a. the strength of that policy as manifested and Ralph made their agreement since both by legislation or judicial decisions, parties knew that the corporation's prod- b. the likelihood that a refusal to enforce ucts would be used primarily for purposes the term will further that policy, which were expressly illegal. We conclude c. the seriousness of any misconduct the trial court correctly declared the con- involved and the extent to which it was tract contrary to the policy of express law deliberate, and and therefore illegal and void.... d. the directness of the connection between that misconduct and the term. [judgment affirmed] Applying the Restatement test to the present circumstances, we conclude the Questions interest in enforcing this contract is very 1. Who raised the winning argument in tenuous. Neither party was reasonably jus- the Bovard case? What was it? tified in expecting the government would 2. What provision of the contract in the not eventually act to geld American Horse Bovard case was illegal? Enterprises, a business harnessed to the 3. Did the court in Bovard overstep its production of paraphernalia used to facili- bounds and infringe on the role of the leg- tate the use of an illegal drug. Moreover, islature
