Also known as: private contracts
Written by attorneys · grounded in primary & secondary sources — see below
An agreement between private parties that creates enforceable obligations under contract law. Such agreements receive protection against substantial impairment by state legislation when the impairment serves no important public purpose or lacks reasonable tailoring to an emergency.
Portia Price holds a mortgage on her home. When an economic emergency strikes, the state enacts a temporary moratorium on foreclosures. The law impairs her lender's enforcement rights under the original loan agreement, yet the court upholds the statute because it addresses a legitimate public need with narrowly drawn relief.
Paula Pierce and Paul Peterson sign a long-term supply contract. A later statute retroactively voids key payment terms. The court strikes the statute because it impairs a lawful private contract without justification under fundamental principles of justice.
Select any source to read its text and confirm it supports the definition.
Pedro Pacheco buys a car under a contract that limits the dealer's liability for defects. After an injury occurs, the court refuses to enforce the waiver because the private contract attempts to limit liability in a context where public policy demands accountability.
Perry Pratt and Pierce Patterson live together under a written support agreement. When the relationship ends, one seeks enforcement. The court declines because the private contract functions as an alternative to marriage and contravenes public policy favoring formal marital status.
Prime Logistics faces a derivative suit. Its officers rely on a private indemnity contract to shift defense costs. The court weighs the contract's value when deciding whether to dismiss the action, treating the agreement as a factor that reduces the corporation's net litigation expense.
Pacific Bank finances mining operations under long-term leases. A new statute requires support of surface structures. The court sustains the law because the impairment of the private contracts serves a substantial public interest in safety and is reasonably tailored.
No. A spendthrift provision restrains both voluntary and involuntary transfers of a beneficiary's interest. A marital settlement agreement that attempts to assign future distributions is a voluntary transfer barred by the clause, so the trustee need not honor it.
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No. A contract to exercise a non-presently-exercisable power is unenforceable. The promisee may recover restitution for value conferred but cannot compel the appointment or obtain expectation damages.
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A donee may release a releasable power in part by contracting with a person adversely affected by its exercise. The contract operates as a partial release, rendering later inconsistent appointments ineffective.
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…supra , 175 A. L. R., at pp. 14-17. But in recent times the books have not been barren of instances of its application in private contract controversies, witness, e. g., Kuzmiak v. Brookchester, supra ; Fairfax Gas & Supply Co. v. Hadary , 151 F. 2d 939 (4 Cir. 1945); and Cutler Corp. v. Latshaw, supra . In the last…