We shall next consider the various elements necessary to make a contract enforceable in court, either by the compelling of specific performance or the payment of damages for non-performance. The contract must have a legal object, competent parties, offer and acceptance, reality of consent, and consideration.

Legal Object

When an agreement has an illegal object it is not a contract and is not enforceable at law. A contract must have a lawful purpose. Clearly, if a man should bind himself to another to kill a third party he could not be compelled to perform his agreement. Illegal agreements may be in violation of statutes or against public policy. An agreement directly opposed to the constitution or the statutes of the United States, or of the State to which the parties are subject, or infringing a Federal treaty, will not be enforced by the courts. There are any number of laws which may invalidate agreements made in disobedience to them, but we shall mention here only a few of the more important. Most States by law forbid the transaction of business on Sunday. The courts, however, will usually enforce a business agreement which has been entered into on a Sunday if it has been ratified on a week day. The law would not, generally, affect contracts entered into on Sunday the object of which was to aid a church or other charity. Contracts for gambling or wagering are usually forbidden. Wagers on the rise or fall of prices (stock market transactions) are illegal only where there is no intent to deliver or receive the stock. At one time insurance was a favorite wagering contract. Insurance contracts are now permitted by law, provided that the person taking out the insurance has some insurable interest in the life or property which the policy covers. Contracts for usury are illegal. In most States the statutes limit the rate of interest which may be charged for the use of money. Of course the amount of interest may be fixed below the rate established by law. The penalty for those who stipulate for a higher rate of interest than the maximum varies greatly, while a few States have no penalty at all. Agreements against public policy are those deemed injurious to the public welfare. They may be against the Government itself or some established interest of society. Public health and morals must be protected and agreements to do something which will interfere with them are unenforceable. Agreements to influence legislation; interfering with the marriage relation; suppressing bidding, either on contracts or at a public sale; obstructing justice; aiding a public enemy; inducing the commission of crime - are contrary to public policy and void. In many cases the agreement is void and there is a penalty for entering into it.