Law Commons^™

Harm, Ambiguity, And The Regulation Of Illegal Contracts, Adam B. Badawi

Adam B. Badawi

Prohibitions on contract are a common technique for achieving desired policy outcomes. By deeming certain bargains unlawful or contrary to public policy, judges and other policy actors expect to prevent some of the harm that these contracts can create. The presumptive remedy used to accomplish this goal is non-enforcement—which leaves the parties in the position that courts find them. But the standards that govern whether to impose this stern remedy do not place third-party harm at the forefront of the analysis. Consequently, the current framework can underdeter harmful contracts and overdeter contracts that may be harmless. These effects can be …