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Am Jur 2d - Contracts § 216

III. Legality of Contracts, A. In General, § 216 - Legality of contracts, generally

In general, parties are free to contract as they see fit,[1] on any terms regarding a subject matter in which they have an interest,[2] provided that the contract does not impose obligations that are contrary to statute,[3] public policy,[4] or an established rule of the common law.[5] Thus, the law recognizes and protects a broad freedom of contract[6] and competent persons ordinarily have the utmost liberty of contracting,[7] and may incorporate in their agreements any provisions that are not illegal or violative of public policy.[8]

The law looks with favor upon the making of contracts between competent parties upon valid consideration and for lawful purposes,[9] and courts generally enforce private agreements between parties.[10] In fact, out of respect for the freedom to contract, courts are hesitant to interfere with purely private agreements.[11] Courts may not declare illegal a type of contract specifically authorized by the legislature.[12] Indeed, given the strong commitment to the principle of contractual freedom, courts should hesitate to infer from a statutory clause granting specific permission to contract under certain circumstances a general prohibition against contracting under other circumstances.[13]

Observation:

A lawful cause[14] or object[15] is necessary to the existence of a contract.

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1   Mendez, Jr. v. Hampton Court Nursing Center, LLC, 140 So. 3d 671 (Fla. 3d DCA 2014) , review granted, 168 So. 3d 227 (Fla. 2014) ; Corwin v. DaimlerChrysler Ins. Co., 296 Mich. App. 242, 819 N.W.2d 68 (2012) ; Zachry Const. Corp. v. Port of Houston Authority of Harris County, 449 S.W.3d 98 (Tex. 2014) .

2   Grand Master Contracting, L.L.C. v. Lincoln Apartment Management Ltd. Partnership, 314 Ga. App. 449, 724 S.E.2d 456 (2012) .

3   Pest Management, Inc. v. Langer, 369 Ark. 52, 250 S.W.3d 550 (2007) ; Sylva Shops Ltd. Partnership v. Hibbard, 175 N.C. App. 423, 623 S.E.2d 785 (2006) ; Teodecki v. Litchfield Twp., 2015-Ohio-2309, 38 N.E.3d 355 (Ohio Ct. App. 9th Dist. Medina County 2015).

4   City of New Albany v. Cotner, 919 N.E.2d 125 (Ind. Ct. App. 2009) ; In re Marriage of Traster, 301 Kan. 88, 339 P.3d 778 (2014) ; CAS Severn, Inc. v. Awalt, 213 Md. App. 683, 75 A.3d 382 (2013) .

5   Wm. Lindeke Land Co. v. Kalman, 190 Minn. 601, 252 N.W. 650, 93 A.L.R. 1393 (1934) .
 As to contracts in violation of constitutions, statutes, regulations, or ordinances, generally, see §§ 223 to 230 .

6   Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011) .

7   Rodriguez v. Builders Firstsource-Florida, LLC, 26 So. 3d 679 (Fla. 4th DCA 2010) ; Guideone Ins. Co. v. U.S. Water Systems Inc., 950 N.E.2d 1236, 74 U.C.C. Rep. Serv. 2d 806 (Ind. Ct. App. 2011) ; In re Marriage of Matar and Harake, 353 Or. 446, 300 P.3d 144 (2013) .

8   Ard Dr. Pepper Bottling Co. v. Dr. Pepper Co., 202 F.2d 372 (5th Cir. 1953) .

9   Shuttleworth, Ruloff and Giordano, P.C. v. Nutter, 254 Va. 494, 493 S.E.2d 364 (1997) .

10   Rollyson v. Jordan, 205 W. Va. 368, 518 S.E.2d 372 (1999) .

11   Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 1 A.3d 678, 61 A.L.R.6th 659 (2010) .

12   Rishel v. Pacific Mut. Life Ins. Co. of Cal., 78 F.2d 881, 131 A.L.R. 414 (C.C.A. 10th Cir. 1935) .

13   Churchill Forge, Inc. v. Brown, 61 S.W.3d 368 (Tex. 2001) .

14   State v. Louis, 645 So. 2d 1144 (La. 1994) .

15   City of Cut Bank v. Glacier County, 270 Mont. 355, 891 P.2d 1174 (1995) .

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