In the business world, agreements are a crucial aspect of operations and collaborations. They serve as legally binding documents that outline the terms and conditions of an arrangement between two or more parties. However, not all agreements are legal, and it is essential to be aware of what kind of agreement is illegal for businesses to make.

In general, an agreement is considered illegal if it violates any laws or regulations. This can include contracts that promote discrimination, promote illegal activities, or restrict a person`s legal rights. Below are some examples of agreements that are illegal for businesses to make:

Price Fixing Agreements

Price fixing is an agreement between businesses to maintain a certain price for their products or services. Such arrangements are illegal as they eliminate competition and limit consumer options, leading to higher prices and reduced market opportunities for smaller businesses.

Market Allocation

Market allocation agreements occur when two or more businesses agree to split up a market or territory among themselves. By doing so, they are attempting to eliminate competition, which is a violation of antitrust laws.


Collusion is an agreement between businesses to engage in activities that are detrimental to consumers or competitors. For example, if two companies decide to boycott a supplier to reduce prices, this would be considered collusion and a breach of antitrust laws.

Non-Compete Agreements

Non-Compete agreements are often used to protect a business`s intellectual property or trade secrets. However, if they are too restrictive, they can be considered illegal. Such agreements restrict the employee`s ability to work in the same industry, limiting their career opportunities and violating labor laws.

Discriminatory Agreements

Discriminatory agreements are those that promote bias and discrimination, such as excluding certain groups from a business`s offerings. This includes practices that restrict access to certain products or services based on race, ethnicity, gender, religion, or sexual orientation.

In conclusion, businesses must be aware of what kind of agreement is illegal to avoid legal repercussions. Illegal agreements not only breach laws and regulations, but they can also negatively impact a business`s reputation and financial stability. Therefore, it is essential to seek legal advice when drafting and signing agreements to ensure that they are legal and fair to all parties involved.