Question 1

Jack enters into a contract with Kris, an unlicensed contractor. This contract may be enforceable if

Accepted Answer

A)   the statute's purpose is to protect the public from unauthorized practitioners.
B)   the lack of a license in Kris's occupation bars the enforcement of work-related contracts.
C)   the statute expressly affirms the barring of a contract's enforceability.
D)   the statute does not expressly affirm the barring of a contract's enforceability.E) A) and B)
F) A) and C)

Question 2

A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.

Accepted Answer

A) True 
 B)False

Question 3

A contract to do something that is prohibited by federal statutory law is void from the outset.

Accepted Answer

A) True 
 B)False

Question 4

Lionel obtains a loan from Mortgage Company at an interest rate that exceeds the state's maximum. The lender has

Accepted Answer

A)   imposed a scheme that involves the distribution of property by chance.
B)   engaged in a restraint of trade.
C)   violated a licensing statute.
D)   committed usury.E) All of the above
F) B) and D)

Question 5

All states allow certain forms of gambling.

Accepted Answer

A) True 
 B)False  False

Question 6

Licenses provide a means of protecting the public against actions that could threaten the general welfare.

Accepted Answer

A) True 
 B)False

Question 7

Traditionally, the states considered gambling contracts legal and enforceable.

Accepted Answer

A) True 
 B)False

Question 8

A court usually will reform a covenant only when it is necessary to prevent undue burdens or hardships.

Accepted Answer

A) True 
 B)False

Question 9

A contract between Mia and Niles to lease residential property contains an ex-culpatory clause. Such clauses are

Accepted Answer

A)   enforceable as a matter of public policy.
B)   enforceable if either party is in a business important to the public.
C)   enforceable if an event occurs to which the clause applies.
D)   often held to be unenforceable.E) A) and C)
F) B) and C)

Question 10

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Accepted Answer

A)   enforce the agreement.
B)   obtain damages in the amount of her partner's share of the illegal profits.
C)   obtain damages in the amount of her own share of the illegal profits.
D)   none of the choices.E) B) and D)
F) B) and C)

Question 11

In determining procedural unconscionability, a court is most likely to consider whether

Accepted Answer

A)   none of these.
B)   any provision left one party without a remedy for the other's nonperformance.
C)   any provision deprived one party of the benefits of the agreement.
D)   the buyer had an opportunity to read the contract and ask questions about it.E) A) and D)
F) B) and D)

Question 12

Procedural unconscionability describes contracts, or portions of contracts, that are oppressive or overly harsh.

Accepted Answer

A) True 
 B)False

Question 13

All states require members of certain professions to have licenses.

Accepted Answer

A) True 
 B)False

Question 14

Some contracts are not enforceable because of the negative impact they would have on society.

Accepted Answer

A) True 
 B)False

Question 15

A promise to refrain from competing in business with another is considered to be unconscionable.

Accepted Answer

A) True 
 B)False

Question 16

The general rule is that any party to an illegal contract can recover for performance rendered.

Accepted Answer

A) True 
 B)False

Question 17

Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it

Accepted Answer

A)   requires both parties to obtain business licenses.
B)   is reasonable with respect to geographic area and duration.
C)   relieves the employer from liability for any injury to Orin.
D)   is enforced by a notarized writing.E) All of the above
F) None of the above

Question 18

The state of New York enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to

Accepted Answer

A)   set a maximum rate of interest.
B)   regulate certain forms of gambling.
C)   specify clauses that must be included in certain contracts.
D)   prohibit certain contracts based on their subject matter.E) None of the above
F) A) and C) A

Question 19

Substantive unconscionability has to do with how a term becomes part of a contract.

Accepted Answer

A) True 
 B)False  False

Question 20

Bay Mall requires its tenants to sign a lease that includes a clause releasing the landlord from liability in the event of injury to any person or property no matter who is at fault. This is

Accepted Answer

A)   a covenant not to compete.
B)   an adhesion contract.
C)   an exculpatory clause.
D)   an illusory promise.E) A) and D)
F) B) and C)

Exam 12: The Legality of Agreements

Jack enters into a contract with Kris, an unlicensed contractor. This contract may be enforceable if

Correct AnswerverifiedShow Answer

A party to a contract who has no reason to know that the contract is illegal can often obtain restitution on a partially executed contract.

Correct AnswerverifiedShow Answer

A contract to do something that is prohibited by federal statutory law is void from the outset.

Correct AnswerverifiedShow Answer

Lionel obtains a loan from Mortgage Company at an interest rate that exceeds the state's maximum. The lender has

Correct AnswerverifiedShow Answer

All states allow certain forms of gambling.

Correct AnswerverifiedFalse

Licenses provide a means of protecting the public against actions that could threaten the general welfare.

Correct AnswerverifiedShow Answer

Traditionally, the states considered gambling contracts legal and enforceable.

Correct AnswerverifiedShow Answer

A court usually will reform a covenant only when it is necessary to prevent undue burdens or hardships.

Correct AnswerverifiedShow Answer

A contract between Mia and Niles to lease residential property contains an ex-culpatory clause. Such clauses are

Correct AnswerverifiedShow Answer

Fagin and Gretel agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gretel can

Correct AnswerverifiedShow Answer

In determining procedural unconscionability, a court is most likely to consider whether

Correct AnswerverifiedShow Answer

Procedural unconscionability describes contracts, or portions of contracts, that are oppressive or overly harsh.

Correct AnswerverifiedShow Answer

All states require members of certain professions to have licenses.

Correct AnswerverifiedShow Answer

Some contracts are not enforceable because of the negative impact they would have on society.

Correct AnswerverifiedShow Answer

A promise to refrain from competing in business with another is considered to be unconscionable.

Correct AnswerverifiedShow Answer

The general rule is that any party to an illegal contract can recover for performance rendered.

Correct AnswerverifiedShow Answer

Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it

Correct AnswerverifiedShow Answer

The state of New York enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to

Correct AnswerverifiedA

Substantive unconscionability has to do with how a term becomes part of a contract.

Correct AnswerverifiedFalse

Bay Mall requires its tenants to sign a lease that includes a clause releasing the landlord from liability in the event of injury to any person or property no matter who is at fault. This is

Correct AnswerverifiedShow Answer

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