Question 1

Agreements made by unmarried people who are living together:

Accepted Answer

A) are unenforceable regardless of their nature. 
B) are enforceable if they do not involve the division of property. 
C) are unenforceable if one of the parties is married to someone else. 
D) are considered to be against public policy. 
A) are unenforceable regardless of their nature. 
B) are enforceable if they do not involve the division of property. 
C) are unenforceable if one of the parties is married to someone else. 
D) are considered to be against public policy.

Question 2

Noncompete clauses in contracts:

Accepted Answer

A) are never enforced because they violate anti-trust laws. 
B) are never enforced because they are unethical. 
C) are always enforced under the doctrine of "freedom of contract." 
D) are enforced if found to be reasonable. 
A) are never enforced because they violate anti-trust laws. 
B) are never enforced because they are unethical. 
C) are always enforced under the doctrine of "freedom of contract." 
D) are enforced if found to be reasonable.

Question 3

Statutes that require proof of character and skill and impose penalties for violation are considered to be revenue raising in nature.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true regarding noncompetition clauses in employment contracts?

Accepted Answer

A) These clauses are illegal. 
B) Employments contracts with these clauses are voidable. 
C) These clauses put post-employment restrictions on the employees. 
D) These clauses need to be ratified by the employer. 
A) These clauses are illegal. 
B) Employments contracts with these clauses are voidable. 
C) These clauses put post-employment restrictions on the employees. 
D) These clauses need to be ratified by the employer.

Question 5

The requirements of regulatory statutes indicate that they were intended:

Accepted Answer

A) to regulate competition. 
B) to incentivize innovation. 
C) for the protection of corporations. 
D) for the protection of the public. 
A) to regulate competition. 
B) to incentivize innovation. 
C) for the protection of corporations. 
D) for the protection of the public.

Question 6

Courts may decline to enforce unconscionable terms or contracts.This provision is provided in:

Accepted Answer

A) Section 12 of UCC. 
B) Section 208 of UCC. 
C) Section 4 of UCC. 
D) Section 208 of Restatement (Secon
D) of Contracts. 
A) Section 12 of UCC. 
B) Section 208 of UCC. 
C) Section 4 of UCC. 
D) Section 208 of Restatement (Secon
D) of Contracts.

Question 7

In the case in the text,Gamboa v.Alcarado,what was the rationale for the court's decision?

Accepted Answer

A) The contract was entered into as a result of undue influence. 
B) There was a large disparity in bargaining power and the terms of the agreement the defendants were relying on were in fine print. 
C) The defendants knew the plaintiffs did not read and write in English and took advantage of them when it required them to sign a contract written in English. 
D) Defendants in such cases cannot be allowed to use the very illegality of their agreement as a way to avoid the consequences of their actions. 
A) The contract was entered into as a result of undue influence. 
B) There was a large disparity in bargaining power and the terms of the agreement the defendants were relying on were in fine print. 
C) The defendants knew the plaintiffs did not read and write in English and took advantage of them when it required them to sign a contract written in English. 
D) Defendants in such cases cannot be allowed to use the very illegality of their agreement as a way to avoid the consequences of their actions.

Question 8

In the case in the text,Clark's Sale and Service,Inc.v.Smith,why did the court refuse to enforce the restrictive covenant?

Accepted Answer

A) The restrictive covenant was overly broad and indivisible. 
B) The restrictive covenant did not serve a legitimate business purpose. 
C) The restrictive covenant was unreasonable in time. 
D) The restrictive covenant imposed an undue hardship on Smith. 
A) The restrictive covenant was overly broad and indivisible. 
B) The restrictive covenant did not serve a legitimate business purpose. 
C) The restrictive covenant was unreasonable in time. 
D) The restrictive covenant imposed an undue hardship on Smith.

Question 9

Roger and Erick make a bet concerning whether a certain rich citizen will die within the next year.Neither party has any economic interest in this person's fate,except for that created by the bet.This agreement is:

Accepted Answer

A) unenforceable if statutes prohibit wagering agreements. 
B) unenforceable because it tends toward the commission of a crime. 
C) unconscionable because it contemplates the destruction of life. 
D) a valid and enforceable risk-allocation agreement. 
A) unenforceable if statutes prohibit wagering agreements. 
B) unenforceable because it tends toward the commission of a crime. 
C) unconscionable because it contemplates the destruction of life. 
D) a valid and enforceable risk-allocation agreement.

Question 10

A court will enforce a noncompetition clause even if its restraints are unduly burdensome either on the public or on the party whose ability to compete would be restrained.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following constrains the employee from divulging or using certain information gained during his employment?

Accepted Answer

A) Nonsolicitation agreement 
B) Nondisclosure agreement 
C) Noncompetition clause 
D) Deed of trust 
A) Nonsolicitation agreement 
B) Nondisclosure agreement 
C) Noncompetition clause 
D) Deed of trust

Question 12

Sally agrees to sell Mary her old kitchen appliances for $3,000.Little does Sally know,Mary intends to use the appliances to cook methamphetamine.Mary paid $500 in cash and wrote a check for the remaining amount.The check bounced and Sally sued Mary to recover the remaining money.What is likely the result:

Accepted Answer

A) Sally is entitled to $2,500 because she was unaware of Mary's intention. 
B) Sally is entitled to $2,500 because Mary is in possession if the appliances. 
C) Sally is entitled to $2,500 because even if she knew of Mary's intention there was proper consideration. 
D) Sally is entitled to nothing. 
A) Sally is entitled to $2,500 because she was unaware of Mary's intention. 
B) Sally is entitled to $2,500 because Mary is in possession if the appliances. 
C) Sally is entitled to $2,500 because even if she knew of Mary's intention there was proper consideration. 
D) Sally is entitled to nothing.

Question 13

A noncompetition clause is also known as a "liability waiver."

Accepted Answer

A) True 
 B)False

Question 14

A contract of adhesion is one that the courts will always enforce because of the strong public policy underlying such contract.

Accepted Answer

A) True 
 B)False

Question 15

Statutes that impose a significant license fee and allow anyone who pays the fee to obtain a license are usually classified as ________.

Accepted Answer

A) regulatory 
B) revenue raising 
C) enabling 
D) transparent 
A) regulatory 
B) revenue raising 
C) enabling 
D) transparent

Question 16

84 To encourage people to cancel illegal contracts,courts will allow a person who rescinds such a contract before any illegal act has been performed to:

Accepted Answer

A) recover any consideration that he has given. 
B) be free from criminal liability. 
C) be free from civil liability. 
D) recover the full amount of the agreement. 
A) recover any consideration that he has given. 
B) be free from criminal liability. 
C) be free from civil liability. 
D) recover the full amount of the agreement.

Question 17

In the case in the text,Coma Corporation v.Kansas Department of Labor,why did the court find in favor of the Department?

Accepted Answer

A) Kansas has a strong and longtime public policy protecting wages and wage earners. 
B) Kansas courts do not recognize employment contracts with illegal aliens. 
C) Kansas law forbid the court from recognizing the validity of the contract. 
D) Kansas is a pro-employer state. 
A) Kansas has a strong and longtime public policy protecting wages and wage earners. 
B) Kansas courts do not recognize employment contracts with illegal aliens. 
C) Kansas law forbid the court from recognizing the validity of the contract. 
D) Kansas is a pro-employer state.

Question 18

Describe the three criteria that need to be fulfilled to enforce a noncompetition clause.

Accepted Answer

The three criteria that need to be fulfi

Question 19

Courts will provide a remedy for the breach of illegal agreements.

Accepted Answer

A) True 
 B)False

Question 20

An agreement that unreasonably tends to interfere with family relationships will be considered ________.

Accepted Answer

A) implied-in-fact 
B) valid 
C) exculpatory 
D) illegal 
A) implied-in-fact 
B) valid 
C) exculpatory 
D) illegal

Exam 15: Illegality

Agreements made by unmarried people who are living together:

Noncompete clauses in contracts:

Statutes that require proof of character and skill and impose penalties for violation are considered to be revenue raising in nature.

Which of the following statements is true regarding noncompetition clauses in employment contracts?

The requirements of regulatory statutes indicate that they were intended:

Courts may decline to enforce unconscionable terms or contracts.This provision is provided in:

In the case in the text,Gamboa v.Alcarado,what was the rationale for the court's decision?

In the case in the text,Clark's Sale and Service,Inc.v.Smith,why did the court refuse to enforce the restrictive covenant?

Roger and Erick make a bet concerning whether a certain rich citizen will die within the next year.Neither party has any economic interest in this person's fate,except for that created by the bet.This agreement is:

A court will enforce a noncompetition clause even if its restraints are unduly burdensome either on the public or on the party whose ability to compete would be restrained.

Which of the following constrains the employee from divulging or using certain information gained during his employment?

A noncompetition clause is also known as a "liability waiver."

A contract of adhesion is one that the courts will always enforce because of the strong public policy underlying such contract.

Statutes that impose a significant license fee and allow anyone who pays the fee to obtain a license are usually classified as ________.

84 To encourage people to cancel illegal contracts,courts will allow a person who rescinds such a contract before any illegal act has been performed to:

In the case in the text,Coma Corporation v.Kansas Department of Labor,why did the court find in favor of the Department?

Describe the three criteria that need to be fulfilled to enforce a noncompetition clause.

Courts will provide a remedy for the breach of illegal agreements.

An agreement that unreasonably tends to interfere with family relationships will be considered ________.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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