Question 1

Which of the following is true of blue laws?

Accepted Answer

A)   They prohibit the performance of certain work on Sunday.
B)   They were passed to regulate betting.
C)   They regulate the amount of interest charged for the use of money.
D)   They do not vary across states in a country. A

Question 2

_____ is an example of an illegal wager.

Accepted Answer

A)   Stock transactions on a daily basis
B)   Betting on the future performance of a stock
C)   Commodity transactions
D)   Risk-shifting agreements B

Question 3

A restraint that is merely ancillary to a contract may be legal if:

Accepted Answer

A)   it attempts to relieve one party from liability for willful misconduct.
B)   its purpose is to restrict trade indefinitely.
C)   its purpose is to recover punitive damages.
D)   it is designed to protect interests created by the contract. D

Question 4

Wagering,risk-shifting,and speculative bargaining agreements are considered illegal by statutes.

Accepted Answer

A) True 
 B)False

Question 5

An agreement is illegal if it calls for behavior that violates a statute,but not a general rule of common law.

Accepted Answer

A) True 
 B)False

Question 6

Explain the concept of exculpatory clauses in contracts.

Accepted Answer

The answer of Explain the concept of exculpatory clauses in...

Question 7

Ali enters into a contract with Billy's Brewpub to be a bartender.Ali is not aware that Billy's does not have a liquor license.Under these circumstances,it is most likely that Ali:

Accepted Answer

A)   can recover the wages only for emotional distress.
B)   can recover the wages for bartending before he learned of the violation.
C)   cannot recover the wages for bartending because the license and his employment are not related.
D)   cannot recover any of his wages as illegality makes the contract void.

Question 8

Rent control laws are implemented to limit the exercise of private bargaining power.

Accepted Answer

A) True 
 B)False

Question 9

The courts have no power over unconscionable contracts.

Accepted Answer

A) True 
 B)False

Question 10

If a contract is divisible-that is,if the legal parts can be separated from the illegal parts-the courts enforce the legal parts of the contract.

Accepted Answer

A) True 
 B)False

Question 11

Blue laws are uniform across all states in the country.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a reason for voiding a contract based on illegality?

Accepted Answer

A)   Both of the parties are ignorant of the facts that made the bargain illegal.
B)   It is in violation of the Code alone, not the common law.
C)   It is contrary to public policy.
D)   The court does not allow the recovery of damages.

Question 13

Phil joins Sky-High Designs as a designer.He signs an employee agreement that says he will not engage in design work in the city for six months after termination of his employment with the firm.Phil works with the firm for two years and then resigns to immediately join as a designer in another firm in the same city.Sky-High Designs sues him for breach of contract,and is likely to:

Accepted Answer

A)   lose because employee contracts that restrict trade are illegal.
B)   lose because Phil has free will to do as he chooses.
C)   win because Phil's act is a violation of the Blue laws.
D)   win because the restriction has reasonable geographic and time restrictions.

Question 14

If a contract is divisible,the court:

Accepted Answer

A)   voids the entire contract.
B)   enforces the legal parts of the contract.
C)   enforces the entire contract.
D)   rules that the entire contract as unenforceable.

Question 15

A party to an illegal contract can recover damages for breach of the agreement.

Accepted Answer

A) True 
 B)False

Question 16

Timothy is a construction worker in one of the leading firms of a city.His employment contract includes a clause which says he cannot work as a construction worker within the city for fifteen years once he leaves the company.This clause is:

Accepted Answer

A)   illegal as it is injurious to public service.
B)   only illegal if it violates state or federal antitrust laws.
C)   illegal as a contract in restraint of trade.
D)   legal because the employer can add any constraint to the agreement.

Question 17

Which of the following statements is true of contracts made illegal by statutes?

Accepted Answer

A)   Barbers and beauty operators do not require licenses to work.
B)   Blue laws prohibit certain work and the transaction of certain business on Monday.
C)   Sunday laws do not vary across states in a country.
D)   Forfeiture of excess or all interest is a common penalty for violation of usury laws.

Question 18

Which of the following statements is true of the idea of public policy?

Accepted Answer

A)   A court's view of public policy is determined by what the court believes is in the best interests of society.
B)   Public policy is not affected by any social or economic change.
C)   Courts have limited discretion in ruling on questions of public policy.
D)   The discretion of courts provide the legal system less flexibility that ensures a strict adherence to policies.

Question 19

Agreements that create a conflict between a public employee's personal interests and public duties are illegal.

Accepted Answer

A) True 
 B)False

Question 20

_____ prohibit charging more than a stated amount of interest for the use of money.

Accepted Answer

A)   Sunday laws
B)   Wagering laws
C)   Usury laws
D)   Blue laws

Exam 15: Illegality

Which of the following is true of blue laws?

_____ is an example of an illegal wager.

A restraint that is merely ancillary to a contract may be legal if:

Wagering,risk-shifting,and speculative bargaining agreements are considered illegal by statutes.

An agreement is illegal if it calls for behavior that violates a statute,but not a general rule of common law.

Explain the concept of exculpatory clauses in contracts.

Ali enters into a contract with Billy's Brewpub to be a bartender.Ali is not aware that Billy's does not have a liquor license.Under these circumstances,it is most likely that Ali:

Rent control laws are implemented to limit the exercise of private bargaining power.

The courts have no power over unconscionable contracts.

If a contract is divisible-that is,if the legal parts can be separated from the illegal parts-the courts enforce the legal parts of the contract.

Blue laws are uniform across all states in the country.

Which of the following is a reason for voiding a contract based on illegality?

If a contract is divisible,the court:

A party to an illegal contract can recover damages for breach of the agreement.

Timothy is a construction worker in one of the leading firms of a city.His employment contract includes a clause which says he cannot work as a construction worker within the city for fifteen years once he leaves the company.This clause is:

Which of the following statements is true of contracts made illegal by statutes?

Which of the following statements is true of the idea of public policy?

Agreements that create a conflict between a public employee's personal interests and public duties are illegal.

_____ prohibit charging more than a stated amount of interest for the use of money.