Usurious Contract Law and Legal Definition
Usurious contract refers to those contracts which impose interest on a debt at a rate in excess of that permitted by law or statute. In usurious contract, a lender receives more than the lawful rate of interest. There is a good consideration in part for the promise to fulfill the agreement in usurious contract.
In Chaffe v. Wilson, 59 Miss. 42 (Miss. 1881), the court held that the law will lend no aid to the enforcement of the usurious contract but will relieve against it whenever appealed to by parties whose rights are affected by it. For example, where A is indebted to B and, by consent of all parties, gives his note to C, to whom B is indebted on an usurious contract, in a suit by C on the note thus given, the defense of usury in the contract between B and C might be successfully interposed.
