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The Puzzling Persistence of Unenforceable

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The article discusses the prevalence of unenforceable contract clauses, particularly in employment agreements, and explores why such clauses persist despite their invalidity. It highlights that sophisticated parties often include these clauses knowing they are unenforceable, as they can deter other parties from challenging them due to perceived risks. The author critiques the judicial approach that allows courts to modify or enforce parts of these clauses, arguing that this undermines the deterrent effect of contract law and perpetuates injustices against uninformed third parties. The article calls for a reevaluation of how courts handle unenforceable clauses, suggesting that they should consider the broader implications on affected non-parties and potentially deny enforcement altogether.

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What does it mean to be legally unenforceable?

An unenforceable contract or transaction is one that is valid but one the court will not enforce. Unenforceable is usually used in contradiction to void (or void ab initio) and voidable. If the parties perform the agreement, it will be valid, but the court will not compel them if they do not.

What does it mean if a contract is unenforceable?

Unenforceable refers to a contract , law, or agreement that, although valid, will not be enforced by a court. An unenforceable contract provision is not void , and if the parties fulfill the contracts terms , the court will not object .

What is an example of unenforceable?

Unenforceable contracts are any contracts that will not be enforced by a court. Unenforceable contract examples include void contracts, unconscionable contracts, contracts against public policy, and impossible contracts.

What is an example of an unenforceable contract?

Contracts that include terms opposing state or federal law are automatically unenforceable. For example, if an employer forces an employee to sign a contract that prevents him or her from taking sick leave, it would be considered unenforceable.

What is a common reason a valid contract becomes unenforceable?

Published on July 10, 2024. Understanding what makes a contract unenforceable is crucial for anyone entering an agreement. Among other things, A contract can become unenforceable when it lacks mutual consent, involves illegal activities, or when a party lacks the capacity to understand the terms.