Question

Spirit Importers imports beverages to the USA from various countries. XYZ Liquor is a Texas company that purchases much of its stock from Spirit. The two contract for Spirit to provide XYZ with rum from Venezuela. To encourage the government of Venezuela to end human rights abuses. President Trump issues sanctions against Venenzuela, including a prohibition on the import and sale in the USA of Venezuelan rum. Which of the following is accurate about the enforceability of the Spirit-XYZ contract?

a. The sanctions are irrelevant to validity of this bilateral contract, so a court will enforce it.
b. The contract is voidable, so that either party can choose to terminate it.
c. The sanctions are irrelevant to the validity of this unilateral contract, so a court will enforce it.
d. The contract is void, so no US court will enforce it.

Answer 1

Answer: d. The contract is void, so no US court will enforce it.

Step-by-step explanation:

Sanctions imposed on other countries bear the full weight of the law in the U.S. unless the Judiciary dissents.

The sanctions placed on Venezuela makes importing rum from Venezuela a illegal action. The contract between these two parties is therefore void because they should not be engaging in illegal actions and no U.S. court would enforce it because that would be enforcing an illegal action.