A wager contract is a contract that on the outcome of a risk created or assumed by the contract, one party shall be winner, the other loser. It is illegal.
There are many forms of wager agreements. The most obvious is the ordinary gambling agreement, as upon the outcome of a game of cards, or a horse race, or a presidential election or the like. These are unenforceable, although by the early common law they were enforced by the courts.103
Wager insurance is an illustration. Insurance is not valid except one have an insurable interest in the thing insured, that is, a loss to guard against by reason of his interest in a thing independent of the insurance contract. One cannot have insurance upon a life or upon property in which he has no interest to protect. One may, however, take out insurance on his own life and make his beneficiary whomsoever he will.
Wagering on the rise and fall of the market is another form of wager agreement. To contract for the purchase or sale in the future of a commodity at a price now stated is not gambling if an actual delivery is intended. But if there is an intention to settle by the payment of differences, this is illegal.104 An option contract, that is to say, a contract that an offer either to buy, or to sell, shall remain open for a certain length of time for acceptance, is wagering, where its purpose is merely to gamble against the future rise or fall of prices.105 Thus, if I offer wheat at $1.00 a bushel, and agree for a consideration paid me, that the offer shall remain open ten days, this is a gambling contract if our mutual intention is merely to gamble on future prices, and in some states by statute any option contract in commodities is a gambling contract.
102. In re Fishel, 192 Fed. 412.
103. Bernard v. Taylor, 23 Ore. 416.
By statute in some states, the right to recover money lost by gambling is given. Otherwise it does not exist.
Any agreement which tends to corrupt any branch of the public service is illegal and void, without regard to its actual outcome.
A contract tending to corrupt the public service is void. Contracts tending to cause the judiciary, the legislature or any officer of the Government to show favoritism, or to disregard duty in any manner, are unenforci-ble. Thus, agreements by which one undertakes to "lobby" before the legislature have been repeatedly condemned,106 as has any contract which contemplates personal influence to solicit 107 official action. Contracts with officers whereby they are to obtain greater reward than the law allows, are void.108 Various sorts of cases are almost numberless.
104. Pope v. Hanke, 155 111. 617.
105. Bates v. Wood, 225 111. 126.
106. Mills v. Mills, 40 N. Y. 543.
107. Critchfield v. Paving Co., 174 111. 466.
The actual result in such cases is immaterial. A lobbying agreement may be ineffectual to accomplish its purpose or may accomplish the enactment of a good law. An officer who is promised greater reward may do only what he would or should have done anyway. This is not important. The tendency of the contract to corrupt the public service is what makes it vicious.
By the common law agreements in restraint of marriage were void.
Agreements in restraint of marriage are void. "Marriage lies at the foundation, not only of individual happiness, but also of the prosperity, if not the very existence of the social state; and the law therefore frowns upon and removes out of the way, every rash and unreasonable restraint upon it, whether by way of penalty or inducement." 109
(2) Contract illegal because of manner of formation.
Agreements made on Sunday are illegal under some statutes, unless made to serve some necessity or unless in furtherance of charity.
By common law, contracts made on Sunday were not illegal. An early statute made them so,110 unless such contracts were in aid of works of necessity or charity. Many states have similar statutes. But in all states Sunday contracts are not forbidden. So in some states, contracts, whenever made, that contemplate performance on Sunday, are void.
108. Hogan v. Stophlet, 179 111. 150.
109. Sterling v. Sinnickson, 5 N. J. L. 885. 110. See Richmond v. Moore, 107 111. 429.
The policy of the state, making Sunday contracts void, seems at least questionable and has resulted in many unjust decisions.
If the law requires one to have a license before he can carry on a certain occupation, and such license is intended as a regulation measure a contract made without the license is invalid, but failing to pay license fees required for purely revenue purposes does not invalidate a contract.
If a license must be obtained by one before he may practice a certain occupation or profession, and such license is for the purpose of regulating the calling and protecting the public, any contract made by one who has no such license is invalid, as, for instance, a contract for legal services with one not admitted to practice 111 (fees not recoverable) ; or with a real estate broker who has not paid his license (fees not recoverable).112
C. Intent to Put to Illegal Use Avails of Legal Contract.