Section 1 Contracts
Section 2 Federal Securities Acts
Section 3 Secured Transactions
Section 4 Bankruptcy
Section 5 Debtor-Creditor Relationships
Section 6 Agency
Section 7 Regulation of Employment
Section 8 Business Structure
Section 9 Professional and Legal Responsibilities
Section 10 Individual taxation
Section 11 Corporate Taxation
Section 12 Partnership Taxation
Section 13 Transactions in Property
Section 14 Gift and Estate Tax, Trusts And Exempt Organizations, Other Taxation Topics

1.2.9 Legality of Purpose

An agreement is void if it is illegal or violates public policy.

Example: You hire me to kill your spouse. You give me $5,000 in advance and promise another $10,000 upon completion of the assignment. If I fulfill the contract and you don’t pay the $10,000 fee, the courts won’t help me collect.  On the other hand, if I fail to fulfill the contract, the courts won’t help you get your $5,000 deposit back.

This is an example of a void contract. Contrast this to a contact entered into by a minor or an intoxicated person which may be voidable at the option of the minor or intoxicated person.

Please answer the question below and review your answer.

Note that this question offers death and bankruptcy as two of the choices. In law, the rules for both are usually similar except that after bankruptcy, one is “reborn”. Since there can only be one correct answer, both choices can be rejected.