The legality of international contracts

On Behalf of | Jul 1, 2015 | Firm News |

Courts in California will only enforce contracts that are valid and legal. A contract may be considered invalid in cases involving misrepresentation or coercion, and an agreement is deemed illegal if it calls for the sale of illegal goods or requires an illegal act to be committed. While courts may have little difficulty of establishing the legality of contracts entered into by parties who live in the same jurisdiction, the situation becomes less clear when the parties live in area with different laws.

An act or item that is legal in one country may be illegal in another, and a contract calling for the sale of such an item or the performance of such an act may or may not be enforceable depending on where the case is heard. This type of contract dispute can usually be avoided by thoroughly reviewing the laws of the countries involved before entering into an international agreement.

In some cases, a contract may be legal when entered into but subsequently become illegal due to a change in the law. It may be possible for the contract to endure in these situations if the illegal provisions can be severed. A contract could also be negated even if it was legal when formed if one of the parties performs their obligations under the agreement in an illegal way.

Disputes over contracts can be extremely complex even when the laws of only one state or nation are involved, and resolving them through litigation is often both time consuming and costly. Experienced business law attorneys may urge their respective clients involved in a contractual dispute to make every effort to resolve their differences amicably and avoid the uncertainty of a trial. However, if an agreement remains elusive, an attorney could advocate vigorously in court on behalf of the client.

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