When Is an Agreement Said to Be against Public Policy Answer with an Example

When Is an Agreement Said to Be Against Public Policy? Answer with an Example

An agreement between parties is considered to be against public policy when it goes against the general well-being and welfare of the public. In simpler terms, agreements that are deemed to be against public policy are those that violate laws, regulations, or common ethical standards.

The concept of public policy is crucial in contract law. It serves as a safeguard to prevent parties from entering into agreements that could potentially harm the public interest. The courts have the authority to declare an agreement unenforceable if it is found to be against public policy.

There are various types of agreements that can be considered against public policy. Some examples include:

1. Agreements that involve illegal activities – this includes agreements that aim to facilitate criminal acts such as fraud, theft, or drug trafficking.

2. Agreements that involve the waiver of legal rights – agreements that seek to release one party from legal responsibility for harm caused to another party are considered unenforceable.

3. Agreements that are harmful to public safety – agreements that encourage or promote unsafe practices that could harm others are considered against public policy.

4. Agreements that are discriminatory – agreements that discriminate against protected classes such as race, gender, or age are deemed to be against public policy.

Let`s consider an example to illustrate when an agreement can be deemed to be against public policy:

An employee is offered a job by a company but is asked to sign a contract that includes a non-compete clause. The clause states that the employee cannot work for a competing company within a specific geographic area for two years after leaving the company. This clause can be deemed to be against public policy as it restricts the employee`s right to work and can impede competition in the industry, thereby causing harm to the public interest.

In conclusion, an agreement is said to be against public policy if it contradicts the established legal and ethical standards that are in place to protect the public interest. It is essential to ensure that agreements are not harmful to the public and comply with laws and regulations.