Question 1

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

Question 2

Carl and Rob are both engaged in road construction work. They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Rob will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Rob has bid on both jobs. Rob is awarded both contracts. If Carl now wants to sue Rob for breach of contract:

Accepted Answer

A)  Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Rob's representation that he would not bid. 
B)  the court will likely award Carl damages since Carl is less at fault than Rob. 
C)  the agreement is in violation of public policy and will not be enforced by the courts. 
D)  the agreement obstructs the administration of justice and will not be enforced by the courts. 
A)  Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Rob's representation that he would not bid. 
B)  the court will likely award Carl damages since Carl is less at fault than Rob. 
C)  the agreement is in violation of public policy and will not be enforced by the courts. 
D)  the agreement obstructs the administration of justice and will not be enforced by the courts.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true?

Accepted Answer

A)  Nell can get the money back from Al through litigation. 
B)  Nell can get the money back and force Al to do as he promised. 
C)  Legally, Nell can neither get the money back nor force Al to do as he promised. 
D)  Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50. 
A)  Nell can get the money back from Al through litigation. 
B)  Nell can get the money back and force Al to do as he promised. 
C)  Legally, Nell can neither get the money back nor force Al to do as he promised. 
D)  Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.

Question 6

Philip has been in training for several months and now plans to run in the school-sponsored, ten-mile, fun run mini- marathon. He completes and signs an entry blank which contains the statement, "I hereby agree to hold the sponsors harmless for any injury sustained as a result of participation in this event no matter how such injury may be caused."
a. What is the legal term for this clause in the agreement?
b. Is the clause valid and legally enforceable? Explain its legal effect.

Accepted Answer

^a^.^Thi^sⁱ^s^aⁿ^exculpator^y^clause. This type of clause is generally looked

Question 7

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. The agreement:

Accepted Answer

A)  is reasonable. 
B)  is unreasonable, but enforceable since Andrew agreed to it. 
C)  unduly interferes with the interests of the public. 
D)  is reasonable, but only if Betty paid Andrew enough for the store to compensate him for lost business for three years. 
A)  is reasonable. 
B)  is unreasonable, but enforceable since Andrew agreed to it. 
C)  unduly interferes with the interests of the public. 
D)  is reasonable, but only if Betty paid Andrew enough for the store to compensate him for lost business for three years.

Question 8

As a general rule, illegal contracts are unenforceable and neither party can successfully sue the other for breach or recover for any performance rendered.

Accepted Answer

A) True 
 B)False

Question 9

In cases where one party to an illegal agreement is less at fault than the other, he will be allowed to recover payments made or property transferred.

Accepted Answer

A) True 
 B)False

Question 10

The UCC provides that if a court as a matter of law finds a contract for the sale of goods or a clause of such a contract to have been unconscionable at the time it was made, the court may:

Accepted Answer

A)  refuse to enforce the contract. 
B)  enforce the part of the contract that is not unconscionable. 
C)  limit the application of any unconscionable clause in order to avoid an unconscionable result. 
D)  All of these. 
A)  refuse to enforce the contract. 
B)  enforce the part of the contract that is not unconscionable. 
C)  limit the application of any unconscionable clause in order to avoid an unconscionable result. 
D)  All of these.

Question 11

Where a stipulation in restraint of trade is a part of the contract for the sale of a business, it may be valid if the
restraint is within reasonable limitations to protect the business's goodwill.

Accepted Answer

A) True 
 B)False

Question 12

Non-compete agreements drafted for employees of Internet companies:

Accepted Answer

A)  are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies. 
B)  are subject to larger geographic restrictions than for other types of companies. 
C)  are subject to longer periods of reasonable duration. 
D)  are irrelevant. 
A)  are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies. 
B)  are subject to larger geographic restrictions than for other types of companies. 
C)  are subject to longer periods of reasonable duration. 
D)  are irrelevant.

Question 13

Deanna, an attorney, has a personal injury case which is set for trial next week. She needs a good doctor to testify on behalf of her client, so she contacts Dr. Dogood who agrees to testify on behalf of Deanna's client at the trial. In return for Dr. Dogood's testimony, Deanna agrees to pay Dr. Dogood $10,000 if they win the case, and $5,000 if they lose. Dr. Dogood agrees. The agreement between Deanna and Dr. Dogood is unenforceable.

Accepted Answer

A) True 
 B)False

Question 14

Courts usually will require evidence of what factors for a transaction to be usurious?

Accepted Answer

For a transaction to be usurious, courts

Question 15

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

Question 16

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 17

Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to its manufacturer to be repaired anyway. The watch is destroyed when the DP driver negligently drops and runs over the package. Mary is:

Accepted Answer

A)  out of luck because the clause was communicated to her. 
B)  out of luck because she should have insured the package. 
C)  likely to collect from DP since exculpatory clauses always violate public policy. 
D)  likely to collect from DP because it is a common carrier. 
A)  out of luck because the clause was communicated to her. 
B)  out of luck because she should have insured the package. 
C)  likely to collect from DP since exculpatory clauses always violate public policy. 
D)  likely to collect from DP because it is a common carrier.

Question 18

Edward, an engineer, is working on a new design for some highly technical equipment which XYZ, Inc. hopes to market within the next five years. The employment agreement between Edward and XYZ states that Edward will not go to work for another company in the same business for a period of two years after termination of his
employment with XYZ, Inc. This agreement is void and unenforceable, because it would make it difficult for Edward to find other employment.

Accepted Answer

A) True 
 B)False

Question 19

What is the legal effect of an agreement that is criminal, tortious, or otherwise contrary to public policy, and why does it have that effect?

Accepted Answer

Agreements that are criminal, tortious,

Question 20

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.

Exam 13: Illegal Bargains

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

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.

Nell gives Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true?

Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere within the state for a period of three years. The agreement:

As a general rule, illegal contracts are unenforceable and neither party can successfully sue the other for breach or recover for any performance rendered.

In cases where one party to an illegal agreement is less at fault than the other, he will be allowed to recover payments made or property transferred.

The UCC provides that if a court as a matter of law finds a contract for the sale of goods or a clause of such a contract to have been unconscionable at the time it was made, the court may:

Where a stipulation in restraint of trade is a part of the contract for the sale of a business, it may be valid if the restraint is within reasonable limitations to protect the business's goodwill.

Non-compete agreements drafted for employees of Internet companies:

Courts usually will require evidence of what factors for a transaction to be usurious?

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

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?

What is the legal effect of an agreement that is criminal, tortious, or otherwise contrary to public policy, and why does it have that effect?

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

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

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

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

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

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