Question 1

Which of the following is true of Sunday contracts?

Accepted Answer

A) They are universal across states. 
B) Judicial interpretation has had no impact on their formulation. 
C) Their laws are a result of statutes . 
D) They make it mandatory to prosecute all violators of such contracts . 
A) They are universal across states. 
B) Judicial interpretation has had no impact on their formulation. 
C) Their laws are a result of statutes . 
D) They make it mandatory to prosecute all violators of such contracts . C

Question 2

​ What are some of the contracts that are contrary to public policy? Describe any two contracts.

Accepted Answer

Some of the contracts that are contrary to public policy are: 
(1)Contracts limiting the freedom of marriage: It is contrary to public policy to enter into any contract the effect of which is to limit the freedom of marriage. Such contracts are void. The following provisions in contracts have been held to render the contract a nullity: 
1. An agreement whereby one party promises never to marry. 
2. An agreement to refrain from marrying for a definite period of time. 
3. An agreement not to marry certain named individuals. 
Similarly, marriage brokerage contracts are unenforceable as against public policy. A marriage brokerage contract is one in which a person agrees to pay another for negotiating, procuring, or bringing about a marriage. 
(2)Contracts injuring the public service: Any contract that may, from its very nature, injure public service is void. A person may contract as an attorney to appear before any public authority to encourage or oppose the passage of any bill. But a contract to use improper influence such as bribery to obtain the desired results is void. 
Contracts to use one's influence in obtaining a public contract that by statute must be let to the lowest responsible bidder, to obtain pardons and paroles, or to pay a public official more or less than the statutory salary are also void.

Question 3

Which of the following is an example of a contract contrary to public policy?

Accepted Answer

A) A purchases a motorcycle from B at a price much lower than its real value. 
B) A agrees to sell 1000 tonnes of rice to the local government. 
C) A agrees to appoint B as sheriff, provided he helps him win the local elections. 
D) A agrees to give $100 to B if he wins the lottery. 
A) A purchases a motorcycle from B at a price much lower than its real value. 
B) A agrees to sell 1000 tonnes of rice to the local government. 
C) A agrees to appoint B as sheriff, provided he helps him win the local elections. 
D) A agrees to give $100 to B if he wins the lottery. C

Question 4

If a druggist sells morphine to one who does not have a prescription, a suit to collect the price would  be successful.

Accepted Answer

A) True 
 B)False

Question 5

Contracts entered into on Sundays are illegal in every state.

Accepted Answer

A) True 
 B)False

Question 6

​ A gambling contract is a transaction wherein the parties stand to win or lose based on pure chance.

Accepted Answer

A) True 
 B)False

Question 7

The penalty for usury is uniform in all states.

Accepted Answer

A) True 
 B)False

Question 8

A contract is indivisible if it can be performed in ways other than as an entity.

Accepted Answer

A) True 
 B)False

Question 9

A person who sells alcoholic beverages to a minor when such a sale is prohibited can recover on the contract.

Accepted Answer

A) True 
 B)False

Question 10

A contract not to compete is valid in which of the following instances?

Accepted Answer

A) Two large businesses dividing sales territory for themselves to avoid competition 
B) The buyer of a business prohibiting the seller from engaging in the same business in a certain town 
C) A business agreeing not to operate in a state to eliminate competition in that state 
D) Three businesses agreeing to take turns providing services to a community on a monthly basis in order to avoid competition. 
A) Two large businesses dividing sales territory for themselves to avoid competition 
B) The buyer of a business prohibiting the seller from engaging in the same business in a certain town 
C) A business agreeing not to operate in a state to eliminate competition in that state 
D) Three businesses agreeing to take turns providing services to a community on a monthly basis in order to avoid competition.

Question 11

The courts will generally still allow a wrongdoer to enforce a contract against an innocent party.

Accepted Answer

A) True 
 B)False

Question 12

Contracts which are designed to limit competition are acceptable by law.

Accepted Answer

A) True 
 B)False

Question 13

Most statutes requiring a license to operate certain types of businesses or professions are enacted to protect the public from incompetent operators.

Accepted Answer

A) True 
 B)False

Question 14

An agreement not to marry during minority is invalid.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true of contracts that limit the freedom of marriage?

Accepted Answer

A) An agreement where one party promises never to marry is held valid. 
B) An agreement not to marry during minority is valid. 
C) A marriage brokerage contract is enforceable by law. 
D) An agreement to refrain from marrying for a definite time period is invariably valid. 
A) An agreement where one party promises never to marry is held valid. 
B) An agreement not to marry during minority is valid. 
C) A marriage brokerage contract is enforceable by law. 
D) An agreement to refrain from marrying for a definite time period is invariably valid.

Question 16

​ A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is:

Accepted Answer

A) voidable. 
B) void. 
C) rescinded. 
D) ratified. 
A) voidable. 
B) void. 
C) rescinded. 
D) ratified.

Question 17

Contracts obstructing the administration of justice are unenforceable.

Accepted Answer

A) True 
 B)False

Question 18

The legal rate of interest is a rate:

Accepted Answer

A) that is higher than the contract rate . 
B) at which no interest is charged . 
C) that is over and above the rate that is lawfully allowed . 
D) that is applied when no rate is specified . 
A) that is higher than the contract rate . 
B) at which no interest is charged . 
C) that is over and above the rate that is lawfully allowed . 
D) that is applied when no rate is specified .

Question 19

In which of the following situations is a state most likely to enforce a usury law?

Accepted Answer

A) X purchases two crates of liquor from a minor. 
B) X sells a plot of land at a rate higher than the maximum contract rate. 
C) X sends two boxes of unapproved medicines to children in Africa. 
D) X charges a very high rate of interest on money borrowed by Y. 
A) X purchases two crates of liquor from a minor. 
B) X sells a plot of land at a rate higher than the maximum contract rate. 
C) X sends two boxes of unapproved medicines to children in Africa. 
D) X charges a very high rate of interest on money borrowed by Y.

Question 20

If a contract is divisible so that the legal parts can be performed separately from the illegal parts, then the legal parts of the contract are:

Accepted Answer

A) enforceable . 
B) void . 
C) unconscionable . 
D) quasi-contractual in nature . 
A) enforceable . 
B) void . 
C) unconscionable . 
D) quasi-contractual in nature .

Exam 10: Illegal Agreements

Which of the following is true of Sunday contracts?

​ What are some of the contracts that are contrary to public policy? Describe any two contracts.

Which of the following is an example of a contract contrary to public policy?

If a druggist sells morphine to one who does not have a prescription, a suit to collect the price would be successful.

Contracts entered into on Sundays are illegal in every state.

​ A gambling contract is a transaction wherein the parties stand to win or lose based on pure chance.

The penalty for usury is uniform in all states.

A contract is indivisible if it can be performed in ways other than as an entity.

A person who sells alcoholic beverages to a minor when such a sale is prohibited can recover on the contract.

A contract not to compete is valid in which of the following instances?

The courts will generally still allow a wrongdoer to enforce a contract against an innocent party.

Contracts which are designed to limit competition are acceptable by law.

Most statutes requiring a license to operate certain types of businesses or professions are enacted to protect the public from incompetent operators.

An agreement not to marry during minority is invalid.

Which of the following is true of contracts that limit the freedom of marriage?

​ A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is:

Contracts obstructing the administration of justice are unenforceable.

The legal rate of interest is a rate:

In which of the following situations is a state most likely to enforce a usury law?

If a contract is divisible so that the legal parts can be performed separately from the illegal parts, then the legal parts of the contract are:

Introduction to Law

Courts and Court Procedures

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Contracts

Warranties Product Liability and Consumer Protection

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties, Holders in Due Course and Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Introduction to Business Organizations

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corporation

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills Inheritances and Trust

Filters

What are some of the contracts that are contrary to public policy? Describe any two contracts.

A gambling contract is a transaction wherein the parties stand to win or lose based on pure chance.

A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is: