Contract laws generally prohibit contracts that restrain trade. Contracts restraining trade are defined as contracts that reduce the level of competition involved in the commercial exchange of goods or services. Contracts that restrain trade are considered a classification of contracts that are contrary to public policy.

These kinds of contracts are sometimes defined by contract laws as covenants not to compete and sometimes as non-competition contracts. Whichever they are known as, though, they are illegal and are thus considered unenforceable. 

Elements of contracts that restrain trade are generally permissible if they are limited in scope or duration. A contract is permissible if it compels a party to the contract to relinquish the right to make a particular thing, but not if it attempts to force one of the parties to the contract to not compete with the other in any way in the future.

Contracts are permitted to contain non-competition clauses if the clause exists in order to protect business secrets of the employer, or if the non-competition element of the contract seeks to limit a former employee from utilizing business contacts which are considered essential to the operations of the company with which the original contract was signed.

Fraudulent misrepresentation may be claimed by a party attempting to have a contract declared void if three different criteria are met. The first is that there is an occurrence intended to create justifiable reliance on a fraudulent misrepresentation. 

The party seeking to have a contract invalidated must show that they entered into the contract due to a justifiable reliance on the other party’s fraudulent misrepresentation. Justifiable reliance only becomes an issue if the claim is not readily apparent to be false. Failure to investigate a claim may be used to support a claim of justifiable reliance. The material misrepresentation must be made about an area that the injured party had no way of proving and thus was forced to rely on the other party’s statement.

Non-fraudulent misrepresentation can take one of two forms: innocent misrepresentation or negligent misrepresentation. Negligent misrepresentation is considered in the eyes of the law to contain the same level of culpability as fraudulent misrepresentation.

Misrepresentation that is negligent in nature is treated by the courts in the same way as a fraudulent misrepresentation. Negligent misrepresentation occurs when a party to a contract does not carry out a reasonable effort to ensure that their claims as the material information at the heart of the contract are true.

If one of the parties to the contract in question does not act with the professionalism that would reasonably be expected from an individual in that position, and the other party relies on that professionalism when entering into the contract, then negligent misrepresentation may be determined by the courts to have happened.

A contract can be challenged by one of the parties to the contract if they claim their assent was not genuine because they were subject to undue influence. Undue influence is said to exist if an inordinate amount of pressure is placed upon a party to enter into a contract against their best interests. Undue influence cannot be invoked by a party simply because they are in a detrimental contract. 

Undue influence is usually only claimed in the event that the party is in a relationship wherein another person is able to influence their decisions. Normally undue influence can only be successfully claimed by a minor or an elderly person who has a guardian responsible for overseeing their legal or financial obligations.

Other relationships in which undue influence may arise include attorney-client relationships, doctor-patient relationships, and the relationships between the beneficiaries of a trust and the individual responsible for managing the trust.

An occurrence of undue influence can be difficult to establish conclusively in court. There is sometimes an automatic presumption of undue influence by the courts. A presumption of undue influence can be established if the party in the superior position influenced the dependent party to agree to a contract that benefited the superior party.

If the dependent party challenges a party that they were influenced to create by their guardian, the courts are likely to issue a presumption of undue influence because they believe that if the contract did not arise due to undue influence, then the dependent would not be challenging the contract.

The guardian involved in a court case in which the genuineness of assent in a contractual dispute involves a presumption of undue influence often bears the responsibility of disproving the charge filed against them by their ward. The undue influence charge is often repudiated by presenting evidence that the ward inquired about the terms of the contract or was afforded the opportunity to consult with an independent party that did not have a direct stake in the contractual negotiations that are being challenged.

The guardian can disprove that there has been an occurrence of undue influence even if there was a benefit conveyed to the guardian if they can demonstrate that the ward received a full disclosure of the benefit that the guardian would derive from the contract. If the guardian can prove that full disclosure was presented to the ward, that the ward obtained independent analysis of the benefits that all involved parties would receive, then the presumption of undue influence can be disproven.

In the event that undue influence is found to have existed by the courts, the courts will declare the contract to be voidable by the ward. Undue influence, however, cannot be claimed by a ward that acted upon the innocent advice of their guardian yet was harmed by the contract in a way that did not benefit the guardian.

Blue laws are a diminishing category of law in the United States. Despite being present in thirty-one states, the exact contents of each blue law varies from jurisdiction to jurisdiction. A law is classified as a blue law if it restricts commercial activity on a particular day. 

Normally a blue law prohibits the ability of a business to operate on a Sunday. The prohibition on commerce on Sunday derives from Christian religious tradition. As a result, blue laws in some states instead preclude businesses from being open on consecutive weekend days out of respect for different Sabbath observances by different religious groups.

Most states that contain blue laws apply them to the sale of alcohol. Alcohol sales may be restricted from being sold at all on Sundays. In blue law states which do not prohibit the sale of alcohol entirely on Sunday, limitations may be placed upon the hours during which alcohol may be sold. These blue law restrictions typically preclude the sale of alcohol to hours during which church sessions would not be held.

A blue law can also restrict the sale of alcohol between certain hours during the week. Restaurants in some blue law jurisdictions can obtain permits to allow the sale of alcoholic beverages so long as a particular percentage of their revenues come from food sales.

Depending on the State, towns may be allowed to opt out of observing blue laws. Some states allow local jurisdictions to opt in or out of blue laws by a majority vote. Other states restrict the ability of a local jurisdiction to opt out of blue laws based on particular criteria. In South Carolina, for example, an area can only opt out once it can demonstrate a certain level of sales tax receipts.

Blue laws may be supported for a variety of reasons. Car dealerships sometimes support blue laws because it allows them to afford their employees a day off without being concerned that a competitor is open.

There may not be support among voters to repeal blue laws. This is the situation in Bergen County in New Jersey, the only part of New Jersey with blue laws that prohibit commercial activity on Sundays. Despite pressure from the State Government to join the rest of the State in repealing blue laws, some Bergen County residents enjoy the fact that the large commercial centers in the county are relatively empty and peaceful on Sundays.

A contract may be ruled to be illegal by any court of law. Illegality can become an issue even if the normal requirements of acceptance of offers, consideration, contractual capacity, are present. Illegal contracts typically do not result in any liability for the involved parties. The courts may rule an illegal contract exists regardless of whether or not the parties involved in the suit raise the issue, even if the two parties believe the contract to be legal.

A severable or divisible contract may be formed by the parties to the contract or may result from actions of the courts. The parties can create a severable contract by including a severence clause into the original contract. A severance clause is a clause which states that if there is one other contractual clause that would cause the contract to be considered illegal, then the offending phrase should be stricken from the contract, so long as the removal of the clause does not substantially alter the original nature of the contract. 

Divisible contracts are similar contracts entered into by the same parties which have similar terms but can be completed independently of each other. A court may form a severable contract by utilizing a blue pencil test. If the offending phrase in a contract can be removed from the contract without enacting any change besides turning an illegal contract into a legal one, then the change passes the blue pencil test.

Contracts that are adjudicated to be contrary to public policy may result in portions of the contract being declared unenforceable.

An exculpatory clause is a provision of a contract that releases one party of the contract from all liability no matter who is at fault. Exculpatory clauses are normally permitted to remain in effect if the contracted party is engaged in an enterprise that is not considered essential to the public good, such as the operation of a recreational facility. However, with a clause that releases a company from liability which functions in a business that is considered essential to the public good, the courts w