Generally speaking, American contract law allows parties a great deal of freedom to enter into highly customized agreements with one another, and in fact, the ability to freely structure a contract is so extensive that there are literally an infinite number of permutations.
Though incredible contractual flexibility is afforded by the law, this flexibility is not uncontrolled or unlimited. Each and every state imposes specific limits to prevent the creation of contracts that are fundamentally abusive, illegal, or that otherwise run contrary to public policy. To put it in simpler terms: depending on the circumstances and/or nature of the contract itself, some contracts are prohibited by law.
If you’re interested in drafting and executing a contract, you’ll want to make absolutely sure that your contract is actually enforceable under the law. An illegal or otherwise prohibited contract will not be enforceable by any legal mechanism — it will be void on its face. Avoid them!
Let’s take a look at a few important contract prohibitions that are uniformly imposed by jurisdictions across the United States. By understanding the legal limits of contract in the United States, you’ll be better prepared to draft and execute an enforceable agreement.