Agreements against public policy are contracts that are deemed invalid by the law because they violate the common good or morality of society. Such agreements are considered to be against public policy as they go against the principles of morality, justice, and equity. In this article, we will discuss what agreements against public policy are, their types, and their effects on businesses.
What are Agreements Against Public Policy?
Agreements against public policy can be broadly defined as agreements that are detrimental to the public. Such agreements are void and unenforceable by law. The term “public policy” refers to the fundamental principle of law that states that contracts must not be contrary to the public good.
Types of Agreements Against Public Policy
1. Agreements that violate the law: Any agreement that violates the law is considered against public policy. This includes agreements that promote illegal activities or those that are made with the intention of defrauding the law.
2. Agreements that are against morality: Agreements that are against public policy also include any agreement that goes against public morality. For instance, agreements that promote prostitution, blasphemy, or racial discrimination.
3. Agreements that are in restraint of trade: Any agreement that restricts or hinders the freedom of trade is also considered to be against public policy. This includes agreements that impose unreasonable restraints on competition, such as non-compete clauses.
Effects of Agreements Against Public Policy
Agreements against public policy are considered null and void. This means that the contract cannot be enforced in a court of law, and the parties involved cannot seek any legal remedy on the basis of such agreements. Furthermore, the parties involved in such agreements may be subject to legal action, including fines, penalties, or imprisonment.
Businesses that engage in agreements against public policy risk losing their reputation and credibility. This can adversely affect their business operations and profitability. Moreover, such businesses may also face legal liability, which can result in heavy financial losses.
Conclusion
Agreements against public policy are a breach of the fundamental principles of law and morality. These agreements are not only against the public good but also pose a significant risk to businesses. Therefore, it is imperative for businesses to ensure that they avoid entering into such agreements and to seek legal advice before entering into any agreements to prevent any legal repercussions.