Restatement 74 and Illegallity Forum

[Mce252]

If a contract involves illegal activity and would be considered against public policy, can an honest release of a claim that one of the parties believes they have under the agreement be consideration for another contract? I know that in typical situations, any release of a claim that a party believes may be genuine can be good consideration, but I'm not sure if it works that same way when the original claim is agaisnt public policy.

[rogermurdoch]

If a contract involves illegal activity and would be considered against public policy, can an honest release of a claim that one of the parties believes they have under the agreement be consideration for another contract? I know that in typical situations, any release of a claim that a party believes may be genuine can be good consideration, but I'm not sure if it works that same way when the original claim is agaisnt public policy.

It seems like the good faith belief would make it valid consideration. I think the second contract might be against public policy. Seems like a court would not enforce a contract not to sue for breach of a contract to sell cocaine. But they might be more likely to enforce a contract not to sue for a breach of a non-compete clause in an employment contract. These are just wild guesses though.

[Mce252]

I think you're right. My guess is that a contract based on a release of a claim against public policy would also be against public policy.