Opinion ID: 1656980
Heading Depth: 1
Heading Rank: 4

Heading: Void as Against Public Policy

Text: Appellants finally argue that the service and merchandise-only contracts are illegal and void as against public policy. Again we find no merit in appellants' contention. An insurer may contract with its insured upon whatever terms the parties may agree which are not contrary to statute or public policy. Aetna Ins. Co. v. Smith, 263 Ark. 849, 568 S.W.2d 11 (1978). In Huntsman v. Carroll, 177 Ark. 432, 6 S.W.2d 551 (1928), this court declared the general rule that a contract is against public policy if it is injurious to the interests of the public, or contravenes some established interest of society or some public statute, or is against good morals, or tends to interfere with the public welfare. The facts showed that the public is not harmed by enforcement of these contracts because virtually all funeral homes grant 100% credit for competing contracts. More recently, this court has held that, the public policy of this state is found in its constitution and statutes. Wal-Mart Stores Inc. v. Baysinger, 306 Ark. 239, 812 S.W.2d 463 (1991); Sterling Drug, Inc. v. Oxford, 294 Ark. 239, 743 S.W.2d 380 (1988). The General Assembly has not prohibited the inclusion of service and merchandise-only clauses in pre-need contracts and thus, this court is without the power to find such restrictions void as against public policy. Further, the recently enacted amendments requiring that benefits under burial certificates and insurance policies be payable in cash, changed substantive rights and thus, those amendments cannot be retroactively applied. Carmichael v. Nationwide Life Ins. Co., 305 Ark. 549, 810 S.W.2d 39 (1991). Accordingly, the public policy regarding burial certificates and insurance policies cannot be employed to invalidate pre-need contracts executed prior to those amendments. The chancellor's finding that service and merchandise-only contracts are not void as against public policy is not clearly erroneous. Affirmed.