Find Legal Information

9-08 Unlawful and Voidable Contracts

Download pdf

CHAPTER 9-08UNLAWFUL AND VOIDABLE CONTRACTS9-08-01. Provisions that are unlawful. Any provision of a contract is unlawful if it is:1.Contrary to an express provision of law;2.Contrary to the policy of express law, though not expressly prohibited; or3.Otherwise contrary to good morals.9-08-02. Contracts against the policy of the law. All contracts which have for theirobject, directly or indirectly, the exempting of anyone from responsibility for that person's own<br>fraud or willful injury to the person or property of another, or violation of law, whether willful or<br>negligent, are against the policy of the law.9-08-02.1. Contracts against liability for errors or omissions - Void. Any provision ina construction contract which would make the contractor liable for the errors or omissions of the<br>owner or the owner's agents in the plans and specifications of such contract is against public<br>policy and void.9-08-03. Penalties and penal clauses void. Penalties imposed by contract for anynonperformance thereof are void.9-08-04. Fixing damages for breach void - Exception. Every contract by which theamount of damages to be paid, or other compensation to be made, for a breach of an obligation<br>is determined in anticipation thereof is to that extent void, except that the parties may agree<br>therein upon an amount presumed to be the damage sustained by a breach in cases in which it<br>would be impracticable or extremely difficult to fix the actual damage.9-08-05. Restricting enforcement of rights void. Every stipulation or condition in acontract by which any party thereto is restricted from enforcing that party's rights under the<br>contract by the usual legal proceedings in the ordinary tribunals or which limits the time within<br>which that party thus may enforce that party's rights is void, except as otherwise specifically<br>permitted by the laws of this state.9-08-06. In restraint of business void - Exceptions. Every contract by which anyoneis restrained from exercising a lawful profession, trade, or business of any kind is to that extent<br>void, except:1.One who sells the goodwill of a business may agree with the buyer to refrain from<br>carrying on a similar business within a specified county, city, or a part of either, so<br>long as the buyer or any person deriving title to the goodwill from the buyer carries<br>on a like business therein.2.Partners, upon or in anticipation of a dissolution of the partnership, may agree that<br>all or any number of them will not carry on a similar business within the same city<br>where the partnership business has been transacted, or within a specified part<br>thereof.9-08-07. In restraint of marriage void. Every contract in restraint of the marriage of anyperson, other than a minor, is void.9-08-08. Settlement of damages for personal injuries voidable. Every settlement oradjustment of any claim for relief for damages on account of any personal injuries received,<br>whether death ensues or not to the person injured, and every contract of retainer or employment<br>to prosecute such an action, is voidable if made within thirty days after the injury or if made whilePage No. 1the person so injured is under disability from the effect of the injury so received and within six<br>months after the date of the injury.9-08-09.Rescission of contract for damages for personal injuries.Any personsustaining personal injuries, or in case of the person's death, the person's personal<br>representative, may elect at any time within six months after the date of such injury to avoid any<br>settlement, adjustment, or contract made in connection therewith within the time mentioned in<br>section 9-08-08, by a notice in writing to that effect.The bringing of an action to recoverdamages for such injuries avoids any such settlement or adjustment. Whenever an action is<br>commenced within the period of time herein limited to recover such damages, the amount<br>received by the injured person, or the injured person's representative, in case of the injured<br>person's death, in any such settlement or adjustment is not a bar to the prosecution of the action<br>but may be set up as an offset or counterclaim to the amount of damages recoverable, if any, or<br>applied toward payment of any judgment recovered in any such action if such amount so<br>received by the injured person or the injured person's representative has not been pleaded<br>specifically as an offset or counterclaim.Page No. 2Document Outlinechapter 9-08 unlawful and voidable contracts