Question 1

In the Pacific Custom Pools, Inc. v. Turner Construction Company case, the court found:

Accepted Answer

A)  that the trial court erred in granting a motion for summary judgment on the basis that PCP had not been licensed in California and thus could not bring suit. 
B)  that the purpose of the relevant licensing law was to protect the public from incompetence and dishonesty in those who provide building and construction services. 
C)  that, under the facts, PCP acted reasonably and in good faith to maintain its license. 
D)  PCP met an exception to the California statute providing that a contractor may not maintain an action for the recovery of compensation for work requiring a license unless it had a license at all times during performance of the work. 
A)  that the trial court erred in granting a motion for summary judgment on the basis that PCP had not been licensed in California and thus could not bring suit. 
B)  that the purpose of the relevant licensing law was to protect the public from incompetence and dishonesty in those who provide building and construction services. 
C)  that, under the facts, PCP acted reasonably and in good faith to maintain its license. 
D)  PCP met an exception to the California statute providing that a contractor may not maintain an action for the recovery of compensation for work requiring a license unless it had a license at all times during performance of the work.

Question 2

Under which of the following circumstances would a court be unlikely to enforce the illegal contract?

Accepted Answer

A)  Where the aggrieved party was unaware of the illegality. 
B)  Where a party withdraws from an illegal agreement prior to performance. 
C)  Where the agreement is with an unlicensed attorney. 
D)  Where one of the parties is less at fault than the other. 
A)  Where the aggrieved party was unaware of the illegality. 
B)  Where a party withdraws from an illegal agreement prior to performance. 
C)  Where the agreement is with an unlicensed attorney. 
D)  Where one of the parties is less at fault than the other.

Question 3

Bill is currently enrolled in law school. He expects to graduate and take the bar exam in order to be able to practice law. Before Bill becomes a lawyer, he promises to represent his friend, Tom, in a breach of contract action if Tom will pay him 25% of the settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.

Accepted Answer

A) True 
 B)False

Question 4

An agreement to pay a public officer something extra for performing his official duty is enforceable.

Accepted Answer

A) True 
 B)False

Question 5

a. Explain the meaning of "public policy" in the context that an agreement is void because it violates public policy. 
b. List the most common forms of agreements that violate public policy.

Accepted Answer

a. Judicially declared public policy is

Question 6

Sam, a student, promises to act as a guide on a fishing trip for a group of visiting dignitaries. The dignitaries agree to pay him $200 for his services. Sam guides them, but when they discover that Sam does not have a fishing license, they refuse to pay him. The agreement is an illegal one, which is not enforceable.

Accepted Answer

A) True 
 B)False

Question 7

An exculpatory clause attempts to excuse one from liability for her own tortious conduct.

Accepted Answer

A) True 
 B)False

Question 8

Where parties to a failed agreement are in pari delicto , a court will provide a remedy to the injured party.

Accepted Answer

A) True 
 B)False

Question 9

If a court finds a contract unconscionable:

Accepted Answer

A)  the court may refuse to enforce only the unconscionable part. 
B)  it must, in all states, be found both substantively and procedurally unconscionable to be unenforceable. 
C)  the court must refuse to enforce the contract. 
D)  the contract must fall strictly within the Code's or the Restatement's definition of "unconscionable" to be unenforceable. 
A)  the court may refuse to enforce only the unconscionable part. 
B)  it must, in all states, be found both substantively and procedurally unconscionable to be unenforceable. 
C)  the court must refuse to enforce the contract. 
D)  the contract must fall strictly within the Code's or the Restatement's definition of "unconscionable" to be unenforceable.

Question 10

Delbert won a $500 bet with Samuel on the outcome of the World Series, but Samuel refuses to pay. Discuss what recourse Delbert has. If Delbert had instead bought a ticket from a state-operated lottery, would his recourse be different?

Accepted Answer

Delbert's bet with Samuel is an illegal

Question 11

The Uniform Commercial Code provides that a court may scrutinize every contract for the sale of goods to determine whether, in its commercial setting, purpose, and effect, the contract is:

Accepted Answer

A)  exculpatory. 
B)  unconscionable. 
C)  usurious. 
D)  None of these. 
A)  exculpatory. 
B)  unconscionable. 
C)  usurious. 
D)  None of these.

Question 12

Permissible lender's expenses, which would not be considered in determining the rate of interest under usury statutes, include all but which of the following?

Accepted Answer

A)  Cost of title examination. 
B)  Reasonable cost of drawing up the necessary documents. 
C)  A charge to the borrower of $500 to investigate the borrower's credit, when it actually cost the lender $75. 
D)  All of these charges would be considered in determining the rate of interest under usury statutes. 
A)  Cost of title examination. 
B)  Reasonable cost of drawing up the necessary documents. 
C)  A charge to the borrower of $500 to investigate the borrower's credit, when it actually cost the lender $75. 
D)  All of these charges would be considered in determining the rate of interest under usury statutes.

Question 13

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

Such an agreement is illegal and unenfor

Question 14

In some states, a lender who charges a usurious rate forfeits both the principal and interest on the loan.

Accepted Answer

A) True 
 B)False

Question 15

Edward, an engineer, is working on a new design for some highly technical equipment which Martus, Inc. hopes to market within the next five years. The employment agreement between Edward and Martus 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 Martus, Inc. This agreement is void and unenforceable because, although Martus is a very specialized company, it would make it difficult for Edward to find other employment.

Accepted Answer

A) True 
 B)False

Question 16

The law does not provide a remedy for the breach of an unenforceable agreement.

Accepted Answer

A) True 
 B)False

Question 17

American courts generally will enforce a gambling agreement.

Accepted Answer

A) True 
 B)False

Question 18

Oswald applied for a loan from Pointe Lenders. Pointe's reasonable cost of checking Oswald's credit will be considered as part of the financing charge when determining whether Pointe's rate of interest exceeds that allowable under the usury statute.

Accepted Answer

A) True 
 B)False

Question 19

Nell gives Big 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 20

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

Accepted Answer

A) True 
 B)False

Exam 13: Illegal Bargains

In the Pacific Custom Pools, Inc. v. Turner Construction Company case, the court found:

Under which of the following circumstances would a court be unlikely to enforce the illegal contract?

An agreement to pay a public officer something extra for performing his official duty is enforceable.

a. Explain the meaning of "public policy" in the context that an agreement is void because it violates public policy. b. List the most common forms of agreements that violate public policy.

An exculpatory clause attempts to excuse one from liability for her own tortious conduct.

Where parties to a failed agreement are in pari delicto , a court will provide a remedy to the injured party.

If a court finds a contract unconscionable:

Delbert won a $500 bet with Samuel on the outcome of the World Series, but Samuel refuses to pay. Discuss what recourse Delbert has. If Delbert had instead bought a ticket from a state-operated lottery, would his recourse be different?

The Uniform Commercial Code provides that a court may scrutinize every contract for the sale of goods to determine whether, in its commercial setting, purpose, and effect, the contract is:

Permissible lender's expenses, which would not be considered in determining the rate of interest under usury statutes, include all but which of the following?

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?

In some states, a lender who charges a usurious rate forfeits both the principal and interest on the loan.

The law does not provide a remedy for the breach of an unenforceable agreement.

American courts generally will enforce a gambling agreement.

Oswald applied for a loan from Pointe Lenders. Pointe's reasonable cost of checking Oswald's credit will be considered as part of the financing charge when determining whether Pointe's rate of interest exceeds that allowable under the usury statute.

Nell gives Big 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?

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

Introduction to Law

Business Ethics

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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