LawMeaning

Public Policy

In one sentence

Contracts that violate society's fundamental interests or values are unenforceable.

Plain English

Public policy is the idea that some contracts shouldn't be enforced because they go against what society values or needs. This is broader than just legality; a contract can be technically legal but still violate public policy. For instance, a contract that requires someone to give up their right to sue for personal injury, or one that restricts someone's freedom to work in their profession forever, might be unenforceable on public policy grounds. Courts use public policy to strike down agreements that harm the community's interests, even if both parties agreed to them.

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Example

An employer makes employees sign a contract saying they can never work for a competitor, anywhere in the world, for the rest of their lives. A court might void this as against public policy because it unfairly restricts workers' freedom to earn a living.

Used in a sentence

“The non-compete agreement was unenforceable because it violated public policy by preventing workers from using their skills.”

Related terms

Legality of Subject Matter
A contract must involve a legal purpose; agreements to do illegal things are void.
Unenforceable
A contract or clause that a court will not force either party to follow, even though it appears valid.
Non-Compete Agreement
A contract clause restricting an employee from working for competitors or starting a competing business after leaving.
Implied Covenant of Good Faith and Fair Dealing
An unwritten promise in every contract that parties will act honestly and fairly toward each other.
Mutual Consent
Both parties freely agree to the same terms of a contract without pressure or misunderstanding.
Offer
A proposal to enter into a binding agreement on specific terms.
Acceptance
Agreeing to the exact terms of an offer, creating a binding contract.
Consideration
Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.