Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

Identify five exceptions to the general rule that illegal contracts are unenforceable.

Accepted Answer

a.A regulatory licensing statute is enacted to protect the public against unqualified persons.A revenue-raising statute does not seek to provide protection against the unqualified but is enacted merely to collect a licensing fee as revenue.b.Unless there is an express statutory provision to the contrary, in the case of a regulatory license, an unlicensed person may not collect for his or her services and, in the case of a revenue-raising license, an unlicensed person may collect for his or her services.c.Regulatory: Doctors, lawyers, CPA's and other professionals who must prove their competency based on established criteria of education and/or examinations.Revenue-raising: Individuals and businesses who merely complete a form and pay a fee to obtain a license, such as a bartender or a salesperson who need not pass a competency exam.

Question 3

Courts will not enforce either illegal agreements or agreements induced by criminal conduct.

Accepted Answer

A) True 
 B)False  True

Question 4

Rorzex, Inc.entered into a contract with Denzil under the terms of which Denzil would receive $20,000 if he stole trade secrets from the leading competitor of Rorzex.Denzil performed his end of the agreement by delivering the trade secrets.Rorzex now refuses to pay Denzil for his services.Denzil:

Accepted Answer

A) may recover based upon the express contract of the parties. 
B) may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of Rorzex. 
C) will be unable to recover, because this is an illegal contract. 
D) will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by Rorzex. 
A) may recover based upon the express contract of the parties. 
B) may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of Rorzex. 
C) will be unable to recover, because this is an illegal contract. 
D) will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by Rorzex.

Question 5

The sole nursing home in the county offers a long-term care agreement.The contract is prepared on a standard form and offers terms on a take-it-or-leave-it basis.Such a contract is called:

Accepted Answer

A) exculpatory. 
B) a usurious contract. 
C) an illegal restraint of trade. 
D) an adhesion contract. 
A) exculpatory. 
B) a usurious contract. 
C) an illegal restraint of trade. 
D) an adhesion contract.

Question 6

Carl and Ron 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 Ron will bid on the other, so that they both have work for the summer.When the bids are opened, Carl realizes that Ron has bid on both jobs.Ron is awarded both contracts.Carl now wants to sue Ron for breach of contract.

Accepted Answer

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

Question 7

Andria, 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.Wood who agrees to testify on behalf of Andria's client at the trial.In return for Dr.Wood's testimony, Andria agrees to pay Dr.Wood $10,000 if they win the case, and $5,000 if they lose.Dr.Wood agrees.The agreement between Andria and Dr.Wood is unenforceable.

Accepted Answer

A) True 
 B)False

Question 8

Maximum rates of interest that are permitted under usury statutes are uniform from state to state.

Accepted Answer

A) True 
 B)False

Question 9

American courts generally will enforce a gambling agreement.

Accepted Answer

A) True 
 B)False

Question 10

Philip has been in training for several months and now plans to run in the school-sponsored, 10-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.This is an exculpatory clause.b.This t

Question 11

The courts readily enforce a covenant not to compete during the period of employment.

Accepted Answer

A) True 
 B)False

Question 12

An agreement for an illegal substance will be enforced by the courts if all other elements of the contract are present.

Accepted Answer

A) True 
 B)False

Question 13

Courts usually will require evidence for a transaction to be usurious.What facts will the courts consider as evidence of usury?

Accepted Answer

a.A clause that excuses one party from l

Question 14

Greg signs an employment contract with Marcial Co.If a court determines that the covenant not to compete contained within the contract is illegal, the whole contract will be held unenforceable.

Accepted Answer

A) True 
 B)False

Question 15

Al, an accountant, has a tax service and accounting business in Redwood City.He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm.In the sale contract, he agrees that he will refrain from practicing accounting anywhere within a 100-mile radius of Redwood City for a period of two years.However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home.In this situation:

Accepted Answer

A) Al is in violation of the sale agreement. 
B) the agreement is invalid, because it is an illegal restraint on trade. 
C) the agreement is illegal, because it is a violation of public policy. 
D) the two-year provision is likely to be held invalid, because it is too long a period of time. 
A) Al is in violation of the sale agreement. 
B) the agreement is invalid, because it is an illegal restraint on trade. 
C) the agreement is illegal, because it is a violation of public policy. 
D) the two-year provision is likely to be held invalid, because it is too long a period of time.

Question 16

The usual means of enforcing an agreement prohibiting an employee from competing in a described territory for a stated period of time is by injunction.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A(n) __________ is a measure designed to protect the public from unqualified practitioners.

Accepted Answer

A) exculpatory clause. 
B) revenue license. 
C) regulatory license. 
D) usury statute. 
A) exculpatory clause. 
B) revenue license. 
C) regulatory license. 
D) usury statute.

Question 19

Nanette wanted to purchase a new car and found one she liked at Minson Motors.Several important contractual terms were buried in the written agreement and some of the meaning of the contract was obscured by legal jargon.These practices involved:

Accepted Answer

A) procedural unconscionability. 
B) substantive unconscionability. 
C) adhesion. 
D) exculpatory clauses. 
A) procedural unconscionability. 
B) substantive unconscionability. 
C) adhesion. 
D) exculpatory clauses.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 13: Illegal Bargains

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

Identify five exceptions to the general rule that illegal contracts are unenforceable.

Courts will not enforce either illegal agreements or agreements induced by criminal conduct.

Rorzex, Inc.entered into a contract with Denzil under the terms of which Denzil would receive $20,000 if he stole trade secrets from the leading competitor of Rorzex.Denzil performed his end of the agreement by delivering the trade secrets.Rorzex now refuses to pay Denzil for his services.Denzil:

The sole nursing home in the county offers a long-term care agreement.The contract is prepared on a standard form and offers terms on a take-it-or-leave-it basis.Such a contract is called:

Maximum rates of interest that are permitted under usury statutes are uniform from state to state.

American courts generally will enforce a gambling agreement.

The courts readily enforce a covenant not to compete during the period of employment.

An agreement for an illegal substance will be enforced by the courts if all other elements of the contract are present.

Courts usually will require evidence for a transaction to be usurious.What facts will the courts consider as evidence of usury?

Greg signs an employment contract with Marcial Co.If a court determines that the covenant not to compete contained within the contract is illegal, the whole contract will be held unenforceable.

The usual means of enforcing an agreement prohibiting an employee from competing in a described territory for a stated period of time is by injunction.

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

A(n) __________ is a measure designed to protect the public from unqualified practitioners.

Nanette wanted to purchase a new car and found one she liked at Minson Motors.Several important contractual terms were buried in the written agreement and some of the meaning of the contract was obscured by legal jargon.These practices involved:

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

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

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

Filters