Exam 16: Legality and Public Policy

An unlicensed doctor can sue a patient for the doctor's fee if the patient in fact recovered because of the doctor's care.

If a contract can be interpreted in two ways,one legal and the other illegal,the court will assume that the legal meaning was intended unless the contrary is clearly indicated.

When a nationally-known neurosurgeon in Chicago,Illinois sells her practice,the contract may specify that the seller will not practice within a 100-mile radius of Chicago for one year.

In most states the usury laws apply to loans made to both individuals and corporations.

When an agreement is illegal,parties are usually not entitled to help from the courts.

In the case of an illegal contract,both parties usually are prohibited from seeking relief in the courts:

An agreement is illegal when either its formation or performance is a crime or a tort,or it is contrary to public policy.

An unlicensed insurance broker who cannot personally recover a fee because of the absence of a license can effectively circumvent the statutory requirements by having a friend who is a licensed broker bill for the services and collect the payment for him.

Legislation commonly requires that an installment-sale contract specify the cash price,down payment,finance charges,and insurance costs.