Opinion ID: 2037155
Heading Depth: 1
Heading Rank: 3

Heading: General Principles Governing Contracts Alleged to be Unenforceable on Public Policy Grounds.

Text: This court recently reviewed the principles governing claims that a contract is unenforceable on the basis of public policy in Mincks Agri Center, Inc. v. Bell Farms, Inc., 611 N.W.2d 270 (Iowa 2000). In Mincks, we adopted the following rule from the Restatement (Second) of Contracts: 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. 611 N.W.2d at 275 (quoting Restatement (Second) of Contracts § 181, at 21 (1981) [hereinafter Restatement] ). There is no dispute in the case before us that Bergantzel seeks to recover payment under the contract for her services in negotiating a settlement with Mlynarik's UIM carrier. That leaves three issues for our consideration: (1) Was Bergantzel prohibited from negotiating this settlement because she was not a licensed attorney?; (2) If so, does the attorney licensing requirement have a regulatory purpose?; and (3) Is the interest in enforcement of a contingent fee contract for the performance of legal services by a nonlawyer clearly outweighed by the public policy underlying the attorney licensing requirement? We consider each question separately.