Legal Definitions - public policy

Public policy refers to the fundamental principles, values, and societal goals that guide a community and are often reflected in its laws, regulations, and governmental actions. These principles are established to promote the general welfare, safety, morality, and economic health of the public. In a legal context, public policy acts as a crucial standard: courts may refuse to enforce contracts or agreements that, even if willingly entered into by the parties, violate these deeply held societal principles because upholding such agreements would be detrimental to the public good.

• Example 1 (Contractual Invalidation - Illegal Activity):

  Imagine a situation where two individuals sign a written agreement: one person promises to pay the other a significant sum of money in exchange for the second person intentionally damaging a rival business's property. If the person who was supposed to do the damage fails to do so, and the first person tries to sue them for breach of contract, a court would refuse to enforce this agreement. The contract's purpose—to commit an illegal act of vandalism—directly violates the public policy of maintaining law and order and protecting private property. Therefore, the court would declare the contract void as contrary to public policy, meaning it has no legal standing.

• Example 2 (Contractual Invalidation - Unreasonable Restraint):

  Consider an employment contract where a new employee is required to sign a clause stating they can never work for any competitor, anywhere in the world, for the rest of their life, even after leaving the current company. While companies can include reasonable non-compete clauses to protect their trade secrets, a court would almost certainly find this specific clause unenforceable. Such an extreme and broad restriction on an individual's ability to earn a living and participate in the economy goes against public policy that promotes fair competition, individual economic freedom, and prevents unreasonable restraints on trade. The court would likely strike down this particular clause as void, allowing the employee to seek work elsewhere.

• Example 3 (Broader Societal Principle - Consumer Protection):

  A government agency implements new regulations requiring all manufacturers of children's toys to conduct rigorous safety testing for choking hazards and to clearly label age recommendations on their packaging. This action is a direct manifestation of public policy aimed at protecting the health and safety of children. The underlying principle is that society values the well-being of its youngest members and expects products marketed to them to be safe. These regulations reflect a collective decision to prioritize consumer safety over potential manufacturing cost savings, embodying a core public policy objective.