Exam 12: Capacity and Legality

A contract must be found to violate a specific statute in order for the contract to be void due to illegal subject matter.

You and Gary enter a contract where you will receive $1,000 if you tamper with a slot machine in the "Bye-Bye Bucks Casino" in Las Vegas so that Gary can make it pay out a jackpot whenever he wants it to.You perform your part of the contract,but Gary doesn't pay.In your breach of contract suit against Gary,the court will:

Billy is an avid bicyclist.Billy would like there to be a paved bike path into his neighborhood,so he contacts Don,who heads up the local city-sponsored bicycle program.Don is in charge of deciding where to locate new bicycle paths using the proceeds of a substantial grant that was recently received.Billy arranges to meet with Don at the Harmonic Convergence Brewpub for a few of their Granola Stout specialty brews.They have the following conversation: Billy: Don,you know there's no bike path up to my subdivision,Heavenly Hills.There are many people in Heavenly Hills who would like a bike path constructed up that direction. Don: Yes,I realize that.But there are many areas not yet served by bike paths around town and even though this recent grant is fairly good-sized,it is not unlimited.People are coming out of the woodwork with requests since news of this grant hit the papers. Billy: Well,as you know,I just shared in the recent lottery jackpot.If you do everything you can to make sure that a path out to Heavenly Hills is included in projects funded by this grant,I can give you a few thousand dollars. Don: I'll need a thousand up front before I can promise that.But,if you do that,I can promise you that the good people of Heavenly Hills won't be left out of the final plan. Billy: It's a deal. Billy then reaches into his bike bag and gets $1,000,which he gives to Don.Billy then leaves $40 on the table to cover the cost of their beer,and rides home.Twelve months later,the final plan is announced and there is no path planned out to Heavenly Hills,although there is a path which is planned to go about halfway from downtown in the general direction of Heavenly Hills.Don sues Billy seeking further payment,and Billy countersues seeking a return of his $1,000.What arguments could each raise,and how would a court likely rule? Discuss contract law principles only.

A party who has been induced to enter into an illegal contract because of fraud,duress,or undue influence can sue the other party and recover whatever consideration he has paid.

A contract to discriminate against somebody on the basis of race is illegal because it usually violates state and or federal statutes; if not,it is illegal as being contrary to public policy.

A minor,unable to live at home,contracts to rent an apartment for one year at $600 per month.After living there for three months,he disaffirms the contract.The reasonable value of that apartment was only $500 per month.Assuming no rent has been paid,the minor must pay which of the following?

Exculpatory clauses often are found illegal because they violate state statutes.

If a person is insane at the time of signing a contract,but has not been adjudged insane,that contract is voidable.

Types of contracts that are commonly invalidated include the following EXCEPT:

In order for someone to avoid a contract on the grounds of intoxication,the level of intoxication must have been: