Restatement (Second) of Contracts · Section § 177
This section addresses the unenforceability of agreements that violate public policy, emphasizing the need for consideration of legality in contract formation.
Source: Restatement Restatement (Second) of Contracts § § 177
A promise or agreement is unenforceable if it is contrary to public policy or a statute; however, the rule may not apply if the public interest is outweighed by the individual interests of parties involved.
This section states that certain contracts cannot be enforced if they go against public policy or legal statutes. It acknowledges that sometimes private interests may be prioritized over public concerns.
This section underscores the balance between individual rights and public welfare in contract law.
The applicability of public policy in contract enforcement varies depending on jurisdiction.
The definition of public policy can evolve with societal changes.
Illustration 1
A contract for illegal gambling activities is unenforceable under § 177 due to its violation of public policy.
Illustration 2
A non-compete clause in a contract that excessively restricts a worker's ability to earn a living might be considered against public policy.
This case illustrates how agreements that contravene public policy were deemed unenforceable under § 177, emphasizing the necessity of evaluating the legality of contract terms.
Understanding § 177 is crucial for legal practitioners as it guides the enforceability of contracts. It helps in assessing risks associated with potential disputes over agreements that may contravene public policy.