BUS 393 Lecture Notes - Lecture 8: Insurable Interest, Price Fixing, Contingent Liability

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 393
• Professor: Shafik Bhalloo

Document Summary

Contracts to commit a crime or other illegal acts are void. Ie. contract to commit a crime or tort: prostitution, paying someone to go to jail. Such agreements may be illegal because they"re against public policy or because they violate the terms of a specific statute. The prohibited agreement may or may not be void, depending on the provisions of the statute ie. gambling is permitted, providing the terms of appropriate statutes, like obtaining permits, are complied with. Insurance arrangements can be illegal contracts (a form of wagering) unless they"re intended to cover a loss. Must show that you have an insurable interest in what was insured: insurance payout must compensate for a loss. Contracts where merchants agree to sell their merchandise at a common price (price fixing): legality question. Activities that have the effect of limiting competition are controlled/prohibited.