Restatement § 181: Effect of Failure to Comply with Licensing or Similar Requirement If a party is prohibited from doing an act because of his failure to comply with a licensing, registration or similar requirement, a promise in consideration of his doing that act or of his promise to do it is unenforceable on grounds of public policy if (a) the requirement has a regulatory purpose, AND (b) the interest in the enforcement of the promise is clearly outweighed by the public policy behind the requirement.. R.R. v. M.H. (Surrogacy Agreements / Restatement § 178) FACTS P and D entered into a surrogacy agreement, providing P with full parental rights and obligating D to reimburse P for all fees and expenses paid to her if D attempted to obtain custody or visitation rights After accepting initial fee of $500, D changed her mind but never returned money ISSUE Is the surrogacy agreement enforceable under contract law or do these types of contracts violate public policy / should be invalid? HELD The payment of money to influence the mother’s custody decision makes the agreement to custody void R § 178, a promise or other term of an agreement is unenforceable on grounds of public policy if the interests in its enforcement is clearly outweighed in the circumstances taking by a public policy against enforcement of such terms, into account the parties’ justified expectations, any forfeiture that would result if enforcement were denied, and any special public interest in the enforcement of the particular term Mistake and Changed Circumstances Mistake Important assumption” “Basic Something that would unsettle the agreement completely if untrue / fundamental in character affecting the agreed performance” “Materially One party is much worse off and one party is much better off Mutual Mistake (R § 152) (1) BOTH parties are mistaken
Restatement § 181: Effect of Failure to Comply with Licensing or Similar Requirement If a party is prohibited from doing an act because of his failure to comply with a licensing, registration or similar requirement, a promise in consideration of his doing that act or of his promise to do it is unenforceable on grounds of public policy if (a) the requirement has a regulatory purpose, AND (b) the interest in the enforcement of the promise is clearly outweighed by the public policy behind the requirement.. R.R. v. M.H. (Surrogacy Agreements / Restatement § 178) FACTS P and D entered into a surrogacy agreement, providing P with full parental rights and obligating D to reimburse P for all fees and expenses paid to her if D attempted to obtain custody or visitation rights After accepting initial fee of $500, D changed her mind but never returned money ISSUE Is the surrogacy agreement enforceable under contract law or do these types of contracts violate public policy / should be invalid? HELD The payment of money to influence the mother’s custody decision makes the agreement to custody void R § 178, a promise or other term of an agreement is unenforceable on grounds of public policy if the interests in its enforcement is clearly outweighed in the circumstances by a public policy against enforcement of such terms, taking into account the parties’ justified expectations, any forfeiture that would result if enforcement were denied, and any special public interest in the enforcement of the particular term Mistake and Changed Circumstances Mistake Important “Basic assumption” Something that would unsettle the agreement completely if untrue / fundamental in character “Materially affecting the agreed performance” One party is much worse off and one party is much better off Mutual Mistake (R § 152) (1) BOTH parties are mistaken