legality

Definition: Legality refers to the requirement that both the subject matter and the performance of a contract must be lawful for the contract to be enforceable.
Fundamental Right: The right to contract is essential but not absolute.
Types of Illegal Contracts:
- Barred by Statute: Such as contracts related to illegal gambling.
- Violations of Public Policy: Contracts that violate community morals or welfare, such as unreasonable restraint of trade.
General Rule: Illegal contracts are automatically void. Neither party can enforce them.
- Example: If one party's performance involves illegal activities (e.g., smuggling), the contract is void.

Void Contracts: Contracts that violate specific statutes are deemed unlawful and not enforceable.
- Example: Minimum wage laws restrict contracting for lower wages.

Definition: Public policy reflects the community's morals and principles regarding health, safety, and welfare.
Court Authority: Courts can declare contracts void if they threaten public good.
Common Examples of Void Contracts:
- Contracts that unreasonably restrain trade.
- Sales of public office or political influence.
- Agreements that promise illegal compensation to public officials.
- Contracts promoting corrupt means of obtaining government contracts.
- Agreements interfering with public duties of corporations.

Parties: Walter Alonzo Jernigan and Dorado Beach Hotel Corporation.
Context: Jernigan gambled legally in Puerto Rico but attempted to stop payment on his $6,000 check upon returning to Florida.
Legal Challenge: The hotel sued Jernigan in Florida to collect the gambling debt.

Judgment: The court ruled in favor of Jernigan, stating that enforcing gambling debts contravenes public policy.
Process: The trial was resolved without a jury; the judge issued a summary judgment.
Public Policy Statement: Florida does not enforce debts from gambling that occurs outside sanctioned environments (e.g., illegal street gambling).

Nonenforcement: Courts typically do not enforce illegal contracts and leave parties in their original positions.
Executory vs Executed Contracts:
- For executory contracts: neither party can enforce.
- For executed contracts: no recovery is allowed for what was performed.
Separable Contracts: If illegal portions can be separated from lawful parts, the lawful parts may be enforceable.
- Examples:
  - If one part of consideration is illegal, the contract cannot be enforced.
  - If multiple considerations exist, legal portions can be upheld if apportioned.

Protection Class: If a party belongs to a class protected by specific laws, they may enforce agreements (e.g., illegal bonds).
Rescission Rights: If a party withdraws before illegal actions, they may reclaim what they provided.
Induced Claim: If a party entered into the contract under undue pressure or fraud, they might claim restitution.

Legality Requirement: A valid contract must have a legal purpose.
Public Policy and Law Compliance: Contracts must not violate laws or public policy for enforceability.