Question 1

Bill bets his friend $100 that the Patriots will win the next Super Bowl.This is an:

Accepted Answer

A)  unconscionable contract and therefore illegal. 
B)  illegal wagering agreement. 
C)  agreement to obstruct justice and therefore illegal. 
D)  illegal restraint of trade. 
A)  unconscionable contract and therefore illegal. 
B)  illegal wagering agreement. 
C)  agreement to obstruct justice and therefore illegal. 
D)  illegal restraint of trade. B

Question 2

Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print.This is an example of:

Accepted Answer

A)  procedural unconscionability. 
B)  a reasonable,legal business practice. 
C)  a "Blue law." 
D)  substantive unconscionability. 
A)  procedural unconscionability. 
B)  a reasonable,legal business practice. 
C)  a "Blue law." 
D)  substantive unconscionability. A

Question 3

Although wagering is generally illegal,some states permit certain kinds of regulated gambling,especially wagering conducted by governmental agencies.

Accepted Answer

A) True 
 B)False  True

Question 4

Many states impose no limit on the rate of interest which may be charged on loans to corporations.

Accepted Answer

A) True 
 B)False

Question 5

Claudia sells her highly successful hair salon to Carl.In the sales contract,Claudia agrees never to open a hair salon in the state.Which of the following best describes this contract clause?

Accepted Answer

A)  Void as an illegal primary restraint 
B)  Valid as a reasonable restraint on trade 
C)  An unenforceable restraint of trade contrary to public policy 
D)  Binding as fair protection 
A)  Void as an illegal primary restraint 
B)  Valid as a reasonable restraint on trade 
C)  An unenforceable restraint of trade contrary to public policy 
D)  Binding as fair protection

Question 6

Which of the following would generally be considered to be a revenue-raising licensing law?

Accepted Answer

A)  A statute requiring that doctors be licensed 
B)  A statute requiring that salespeople be licensed,but not establishing any educational or training requirements 
C)  A statute requiring public school teachers to be licensed 
D)  A statute that requires insurance agents to pass a test before selling insurance in a state 
A)  A statute requiring that doctors be licensed 
B)  A statute requiring that salespeople be licensed,but not establishing any educational or training requirements 
C)  A statute requiring public school teachers to be licensed 
D)  A statute that requires insurance agents to pass a test before selling insurance in a state

Question 7

An adhesion contract is offered on a "take-it-or-leave-it" basis.

Accepted Answer

A) True 
 B)False

Question 8

The term "public policy" is precisely and narrowly defined in the Restatement.

Accepted Answer

A) True 
 B)False

Question 9

John operates a small repair business and is in desperate need of a certain type of building material.He obtains the material from a large corporation,but is charged a grossly unreasonable price and is forced to buy other material he does not need.In view of the buyer's unequal bargaining power and unreasonable terms of the contract,this may be a case of:

Accepted Answer

A)  in para delicto. 
B)  partial illegality. 
C)  substantive unconscionability. 
D)  procedural unconscionability. 
A)  in para delicto. 
B)  partial illegality. 
C)  substantive unconscionability. 
D)  procedural unconscionability.

Question 10

"Blue laws" usually apply to contracts of necessity and charity.

Accepted Answer

A) True 
 B)False

Question 11

A contract to commit a tort will be enforced by the courts.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct with regard to an enforceable restraint of trade?

Accepted Answer

A)  The restraint should be no more extensive than is required to protect a specified property interest. 
B)  Restraints typically arise in connection with the sale of a business. 
C)  A typical restraint is a covenant not to compete. 
D)  All of these. 
A)  The restraint should be no more extensive than is required to protect a specified property interest. 
B)  Restraints typically arise in connection with the sale of a business. 
C)  A typical restraint is a covenant not to compete. 
D)  All of these.

Question 13

Define "unconscionability" and distinguish between procedural and substantive unconscionability.

Accepted Answer

Unconscionability means contrary to the

Question 14

Theresa is a travel agent at the Fly Away Travel Agency.She has signed an agreement with her employer which prohibits her from working in any similar business in any town within a 100-mile radius of where she works.If she wants to quit her job and go to work for another travel agency,it is likely that:

Accepted Answer

A)  a court would uphold these restrictions. 
B)  if no trade secrets are involved,and she has no dominion over customers,a court would rule the restrictions to be invalid. 
C)  if the period of time of the agreement is under five years,it will be upheld by the court. 
D)  a court would rule the restrictions invalid unless her work is done predominantly online. 
A)  a court would uphold these restrictions. 
B)  if no trade secrets are involved,and she has no dominion over customers,a court would rule the restrictions to be invalid. 
C)  if the period of time of the agreement is under five years,it will be upheld by the court. 
D)  a court would rule the restrictions invalid unless her work is done predominantly online.

Question 15

At common law,a valid contract may not be entered into on Sunday.

Accepted Answer

A) True 
 B)False

Question 16

Don has an employment contract with Dunkirk Ice Cream.He sells ice cream and novelty ice cream products.He has nine children and doesn't make enough money,so he decides to see if another dairy will hire him,too."After all," he reasons,"most stores carry four or five different brands." His employment contract prohibits him from competing.If Don sells for another dairy in addition to Dunkirk,will he be in trouble under his contract?

Accepted Answer

A)  No,it is unenforceable as against public policy. 
B)  Yes,it is likely to be enforceable during employment. 
C)  No,the prohibition against competing is enforceable only after he quits Dunkirk. 
D)  A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment. 
A)  No,it is unenforceable as against public policy. 
B)  Yes,it is likely to be enforceable during employment. 
C)  No,the prohibition against competing is enforceable only after he quits Dunkirk. 
D)  A court would have to rule on the enforceability of the covenant not to compete since courts are reluctant to enforce such covenants during a period of employment.

Question 17

One type of restraint of trade is a covenant not to compete.

Accepted Answer

A) True 
 B)False

Question 18

A number of states have enacted statutes exempting the following types of lenders from their usury laws:

Accepted Answer

A)  eligible lenders of installment loans. 
B)  lenders for large consumer loans. 
C)  lenders of unsubsidized educational loans. 
D)  None of these.Only certain types of transactions rather than types of lenders are exempted. 
A)  eligible lenders of installment loans. 
B)  lenders for large consumer loans. 
C)  lenders of unsubsidized educational loans. 
D)  None of these.Only certain types of transactions rather than types of lenders are exempted.

Question 19

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or a similar business for a period of twenty-five years would be unreasonable.

Accepted Answer

A) True 
 B)False

Question 20

Bargains are illegal if they involve a crime or tort but not if they are merely against public policy.

Accepted Answer

A) True 
 B)False

Exam 13: Illegal Bargains

Bill bets his friend $100 that the Patriots will win the next Super Bowl.This is an:

Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print.This is an example of:

Although wagering is generally illegal,some states permit certain kinds of regulated gambling,especially wagering conducted by governmental agencies.

Many states impose no limit on the rate of interest which may be charged on loans to corporations.

Claudia sells her highly successful hair salon to Carl.In the sales contract,Claudia agrees never to open a hair salon in the state.Which of the following best describes this contract clause?

Which of the following would generally be considered to be a revenue-raising licensing law?

An adhesion contract is offered on a "take-it-or-leave-it" basis.

The term "public policy" is precisely and narrowly defined in the Restatement.

"Blue laws" usually apply to contracts of necessity and charity.

A contract to commit a tort will be enforced by the courts.

Which of the following is correct with regard to an enforceable restraint of trade?

Define "unconscionability" and distinguish between procedural and substantive unconscionability.

At common law,a valid contract may not be entered into on Sunday.

One type of restraint of trade is a covenant not to compete.

A number of states have enacted statutes exempting the following types of lenders from their usury laws:

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or a similar business for a period of twenty-five years would be unreasonable.

Bargains are illegal if they involve a crime or tort but not if they are merely against public policy.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms

Legal Topics in Property Ownership and Management

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