Question 1

If an illegal agreement has already been performed parties can sue for damages.

Accepted Answer

A) True 
 B)False

Question 2

When a court finds a clause of a contract unconscionable at the time it was made,it may enforce the remainder of the contract.

Accepted Answer

A) True 
 B)False

Question 3

An illegal provision in a contract:

Accepted Answer

A)  causes the entire contract to be voidable. 
B)  causes the entire contract to be rescinded. 
C)  can be ignored by the parties in their performance of the remaining provisions of the contract,assuming that the remaining portions of the contract can stand on their own. 
D)  can be ignored by the parties,because an illegal provision in a contract is not deemed substantial. 
A)  causes the entire contract to be voidable. 
B)  causes the entire contract to be rescinded. 
C)  can be ignored by the parties in their performance of the remaining provisions of the contract,assuming that the remaining portions of the contract can stand on their own. 
D)  can be ignored by the parties,because an illegal provision in a contract is not deemed substantial.

Question 4

The validity of a contract is not affected by:

Accepted Answer

A)  the effect of the contract on the community. 
B)  unconscionability. 
C)  the absence of good faith. 
D)  the fact that the contract turned out to be a bad bargain for one of the parties. 
A)  the effect of the contract on the community. 
B)  unconscionability. 
C)  the absence of good faith. 
D)  the fact that the contract turned out to be a bad bargain for one of the parties.

Question 5

Even if part of a contract is illegal,the court may enforce a divisible,legal part of the contract.

Accepted Answer

A) True 
 B)False

Question 6

An agreement to restrain trade may be void on the grounds that it is:

Accepted Answer

A)  fraudulent. 
B)  contrary to public policy. 
C)  illegal lobbying. 
D)  unfair to merchants. 
A)  fraudulent. 
B)  contrary to public policy. 
C)  illegal lobbying. 
D)  unfair to merchants.

Question 7

A provision in a contract that gives what the court believes is too much of an advantage over a buyer may be held void as unconscionable.

Accepted Answer

A) True 
 B)False

Question 8

Today,what is an important element in determining the validity of a contract?

Accepted Answer

A)  the Uniform Contract Code 
B)  whether the agreement might harm the public welfare 
C)  whether the contract is wise or foolish 
D)  whether the contract operates unequally between the parties 
A)  the Uniform Contract Code 
B)  whether the agreement might harm the public welfare 
C)  whether the contract is wise or foolish 
D)  whether the contract operates unequally between the parties

Question 9

Substantive unconscionability has to do with matters of freedom of assent.

Accepted Answer

A) True 
 B)False

Question 10

Courts are quick to invalidate contracts on the ground that they are contrary to public policy because such contracts are so offensive to society.

Accepted Answer

A) True 
 B)False

Question 11

An agreement not to compete is enforceable:

Accepted Answer

A)  in the sale of a business. 
B)  between competitors. 
C)  in contracts for the sale of goods. 
D)  in contracts for the sale of securities. 
A)  in the sale of a business. 
B)  between competitors. 
C)  in contracts for the sale of goods. 
D)  in contracts for the sale of securities.

Question 12

If a contract appears to be legal on its face,it will be enforceable even if it was entered into for an illegal purpose.

Accepted Answer

A) True 
 B)False

Question 13

A noncompetition covenant may be held invalid because of vagueness concerning the duration and geographic area of the restriction.

Accepted Answer

A) True 
 B)False

Question 14

An agreement that calls for the commission of a civil wrong is illegal and void.

Accepted Answer

A) True 
 B)False

Question 15

When parties are not equally guilty,the least guilty party is granted relief when it is in the public interest.

Accepted Answer

A) True 
 B)False

Question 16

Dealing honestly,reasonably,and in good faith:

Accepted Answer

A)  is implied in every contract for services. 
B)  is implied in every contract for the sale of goods. 
C)  is an expressed obligation in every contract. 
D)  both a and b 
A)  is implied in every contract for services. 
B)  is implied in every contract for the sale of goods. 
C)  is an expressed obligation in every contract. 
D)  both a and b

Question 17

An agreement to slander a third person would not be enforceable because slander is a(n):

Accepted Answer

A)  crime. 
B)  civil wrong. 
C)  infringement of privacy. 
D)  assault. 
A)  crime. 
B)  civil wrong. 
C)  infringement of privacy. 
D)  assault.

Question 18

One element involved in the determination of unconscionability is:

Accepted Answer

A)  the comparative bargaining power of the parties. 
B)  the opportunity to make a contract for better terms with someone else. 
C)  the course of the economy after the contract is made. 
D)  whether a loss will be sustained by performance of the contract. 
A)  the comparative bargaining power of the parties. 
B)  the opportunity to make a contract for better terms with someone else. 
C)  the course of the economy after the contract is made. 
D)  whether a loss will be sustained by performance of the contract.

Question 19

The failure to have a license will not render agreements void if the license:

Accepted Answer

A)  is based on formal education 
B)  is required for engaging in a particular business or trade 
C)  is a regulatory license 
D)  is readily obtainable by anyone who offers payment of a required fee 
A)  is based on formal education 
B)  is required for engaging in a particular business or trade 
C)  is a regulatory license 
D)  is readily obtainable by anyone who offers payment of a required fee

Question 20

In an employment contract,agreements not to compete are:

Accepted Answer

A)  illegal 
B)  uniformly held to be in the public interest and therefore legal 
C)  valid only if the restriction protects the employee 
D)  valid,if the restriction is reasonable and necessary for the protection of the former employer 
A)  illegal 
B)  uniformly held to be in the public interest and therefore legal 
C)  valid only if the restriction protects the employee 
D)  valid,if the restriction is reasonable and necessary for the protection of the former employer

Exam 16: Legality and Public Policy

If an illegal agreement has already been performed parties can sue for damages.

When a court finds a clause of a contract unconscionable at the time it was made,it may enforce the remainder of the contract.

An illegal provision in a contract:

The validity of a contract is not affected by:

Even if part of a contract is illegal,the court may enforce a divisible,legal part of the contract.

An agreement to restrain trade may be void on the grounds that it is:

A provision in a contract that gives what the court believes is too much of an advantage over a buyer may be held void as unconscionable.

Today,what is an important element in determining the validity of a contract?

Substantive unconscionability has to do with matters of freedom of assent.

Courts are quick to invalidate contracts on the ground that they are contrary to public policy because such contracts are so offensive to society.

An agreement not to compete is enforceable:

If a contract appears to be legal on its face,it will be enforceable even if it was entered into for an illegal purpose.

A noncompetition covenant may be held invalid because of vagueness concerning the duration and geographic area of the restriction.

An agreement that calls for the commission of a civil wrong is illegal and void.

When parties are not equally guilty,the least guilty party is granted relief when it is in the public interest.

Dealing honestly,reasonably,and in good faith:

An agreement to slander a third person would not be enforceable because slander is a(n):

One element involved in the determination of unconscionability is:

The failure to have a license will not render agreements void if the license:

In an employment contract,agreements not to compete are:

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Instruments, parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters