Illegal Contracts and Efficient Deterrence: A Study in Modern Contract Theory
49 Pages Posted: 29 Aug 2006
This Article offers a unified theory that explains why courts, despite the compelling argument for deterrence, should not apply the no-effect rule of illegal contracts uniformly and why they should vary the type of relief according to the factual setting. It posits that a graduated relief structure will maximize efficient deterrence. An efficient deterrence scheme will preserve limited personal, judicial and societal resources without burdening legitimate transactions.
Keywords: Public Policy, Illegality, No Effect, Contracts, No-effect Rule, Illegal Contracts, Graduated Relief Structure, Deterrence
JEL Classification: K12, K49
Suggested Citation: Suggested Citation