Exam 13: Legality

Roger parked his car at a garage that has a large sign at the entrance saying,"This garage is not liable for items stolen from a car." This type of notice is referred to as an exculpatory clause.

Which of the following exculpatory clauses will most likely be enforceable?

To be valid,a noncompete clause must be:

Public policy means the law that comes from the:

The UCC deals with unconscionability in a contract by providing that a court may:

Marcy and Elliot are both sophisticated merchants who deal in diamonds.Marcy contracted to purchase a diamond for $20,000.The day after the purchase,Marcy took the diamond to a jeweler's show but the highest offer for the diamond was only $10,000.Is Marcy's contract for purchase of the diamond for $20,000 unconscionable?

Eintz Corp.hired Jose to bribe a foreign government official into awarding a $3 million contract to Eintz.Eintz gave Jose $10,000 in cash to make the bribe payment and $2000 for Jose's efforts.Instead of paying the bribe,Jose pocketed all of the money.If Eintz sues Jose,Eintz will:

Morality plays no part of gambling contract legality.

An agreement may violate public policy even if the agreement does not require a party to commit a crime,tort,or violate a statute.

In 1970,Continental Airlines agreed to buy a number of DC-10 airplanes from McDonnell Douglas Corporation (MDC).Their contract included a limited warranty in which MDC undertook certain servicing obligations and an exculpatory clause in which Continental waived "all other remedies" against MDC.On March 1,1978,one of these DC-10s was nearing takeoff at Los Angeles International Airport when the two front tires of its left-side landing gear blew out.The pilot aborted the takeoff,but the uncushioned landing gear tore through the tarmac and broke away from the plane.This ruptured the left wing fuel tank,which burst into flames.The emergency escape slides failed,apparently due to the heat of the fire.Some passengers evacuated through the copilot's window,others jumped from the exits.Four passengers died,and over 70 suffered injuries.The plane was destroyed.It should be noted that the exculpatory clause did not prevent the passengers from suing Continental and/or MDC.Continental sued MDC and MDC defended based on the exculpatory clause.Is this type of clause enforceable? Discuss exculpatory clauses,particularly the one involved here.

E-mation,Inc hires Marvin to steal trade secrets from one of its competitors for $10,000.Marvin demands half of the money up front.E-mation pays Marvin $5000 but Marvin decides not to pursue theft of the trade secrets.E-mation sues Marvin for the return of the $5000.What will the court do with this contract?

Alpha and Xenon companies are both major international conglomerates.They are negotiating a contract whereby Alpha will install a computer system for Xenon.One clause in the contract states that Alpha will not be liable for damages caused by the negligent installation of the computer system,except that Alpha warrants the system and will fix any problem for a period of two years following installation.Alpha completes the installation of the computer system.Xenon loads extensive amounts of information on the system,but all of it is destroyed because Alpha negligently installed the memory chips.Alpha fixes the memory,but Xenon incurred significant expenses in recreating the lost information.Xenon sues for these expenses.Alpha defends with the noted clause in the contract.

The Tavern's secret recipe for its pizza sauce would be considered:

In many states it is illegal to lend money to help someone gamble.

Discuss the pros and cons of gambling and whether there might be any reason for a court or legislature to treat gambling on credit any differently from gambling itself.

Zach sold a restaurant to Shane for $295,000.As part of the agreement,Zach promised not to open another restaurant business for three years within a 50-mile radius of the one sold.Is this agreement enforceable against Zach?

If a contract is made with a person required by law to hold a license,and the purpose of the license is protection of the public,the contract made by an unlicensed person will generally be unenforceable.

In bailment cases,exculpatory clauses:

Which of the following is an example of an exculpatory clause?

When Randy accepted a job with Buren Construction,Randy signed the following agreement,"Upon termination of my employment with Buren Construction,I agree never to work for another employer as an electrician." If Randy resigns from Buren Construction,this agreement would be upheld under the theory of freedom of contract.