Question 1

Archie bets his friend Jerry $100 that the Packers will win the next Super Bowl. This is an:

Accepted Answer

A)  unconscionable contract and therefore illegal. 
B)  illegal wagering agreement. 
C)  agreement to obstruct justice and therefore illegal. 
D)  illegal restraint of trade. 
A)  unconscionable contract and therefore illegal. 
B)  illegal wagering agreement. 
C)  agreement to obstruct justice and therefore illegal. 
D)  illegal restraint of trade. B

Question 2

Rose is working hard on Arlin's mayoral campaign. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 if she will register and vote for Arlin. Violet does so, but Arlin loses the election, and Rose now refuses to pay. Rose's agreement to pay Violet:

Accepted Answer

A)  is enforceable. 
B)  is unenforceable and opposed to public policy. 
C)  is an agreement to obstruct the administration of justice. 
D)  is an unconscionable contract covered by the UCC. 
A)  is enforceable. 
B)  is unenforceable and opposed to public policy. 
C)  is an agreement to obstruct the administration of justice. 
D)  is an unconscionable contract covered by the UCC. B

Question 3

Divided Parcel (DP) includes the following on its mailing receipts: "We are not responsible for any damages to packages whether or not through the intentional or reckless fault or negligence of our employees. Send packages at your own risk." Mary reads this clause but sends her watch back to the manufacturer to be repaired anyway. The watch is destroyed when the DP driver uses the package for a ball and tosses it to his buddy. Mary is:

Accepted Answer

A)  out of luck because the clause was communicated to her. 
B)  out of luck because she should have insured the package. 
C)  likely to collect from DP since exculpatory clauses always violate public policy. 
D)  likely to collect from DP because it attempted to excuse intentional and reckless behavior. 
A)  out of luck because the clause was communicated to her. 
B)  out of luck because she should have insured the package. 
C)  likely to collect from DP since exculpatory clauses always violate public policy. 
D)  likely to collect from DP because it attempted to excuse intentional and reckless behavior. D

Question 4

Delbert won a $500 bet with Samuel on the outcome of the World Series, but Samuel refuses to pay. Discuss what recourse Delbert has. If Delbert had instead bought a ticket from a state-operated lottery, would his recourse be different?

Accepted Answer

Delbert's bet with Samuel is an illegal

Question 5

A contract that requires a person to commit a tort will be enforced by the courts.

Accepted Answer

A) True 
 B)False

Question 6

Rorzex, Inc. entered into a contract with Denzil under the terms of which Denzil would receive $20,000 if he stole trade secrets from the leading competitor of Rorzex. Denzil performed his end of the agreement by delivering the trade secrets. Rorzex now refuses to pay Denzil for his services. Denzil:

Accepted Answer

A)  may recover based upon the express contract of the parties. 
B)  may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of Rorzex. 
C)  will be unable to recover, because this is an illegal contract. 
D)  will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by Rorzex. 
A)  may recover based upon the express contract of the parties. 
B)  may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of Rorzex. 
C)  will be unable to recover, because this is an illegal contract. 
D)  will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by Rorzex.

Question 7

An agreement to refrain from a particular trade, profession, or business is enforceable if:

Accepted Answer

A)  the purpose of the restraint is to protect a property interest of the promisee. 
B)  the agreement is for no longer than two years. 
C)  the restraint is no more extensive than is reasonably necessary to protect the promisee's property interest. 
D)  Two answers are correct but not all three. 
A)  the purpose of the restraint is to protect a property interest of the promisee. 
B)  the agreement is for no longer than two years. 
C)  the restraint is no more extensive than is reasonably necessary to protect the promisee's property interest. 
D)  Two answers are correct but not all three.

Question 8

Which of the following is NOT true with regard to an exculpatory clause?

Accepted Answer

A)  An exculpatory clause excuses one party from liability for her own tortious conduct. 
B)  Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. 
C)  An exculpatory clause may be unenforceable for unconscionability. 
D)  Exculpatory clauses are almost always against public policy. 
A)  An exculpatory clause excuses one party from liability for her own tortious conduct. 
B)  Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. 
C)  An exculpatory clause may be unenforceable for unconscionability. 
D)  Exculpatory clauses are almost always against public policy.

Question 9

Who usually enters into employment contracts and what provision is commonly included regarding possible restraint of trade? Explain the purpose of such provisions.

Accepted Answer

Salespeople, management personnel, and o

Question 10

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or similar business for a period of twenty-five years would be unreasonable and unenforceable.

Accepted Answer

A) True 
 B)False

Question 11

Carl and Ron both work in road construction. They know that two major jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Ron will bid on the other, so that they both have work for the summer. When the bids are opened, Carl realizes that Ron has bid on both jobs. Ron is awarded both contracts. If Carl now wants to sue Ron for breach of contract:

Accepted Answer

A)  Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Ron's representation that he would not bid. 
B)  since Carl is less at fault than Ron, the court will likely award Carl damages. 
C)  the agreement will not be enforced by the courts because it violates public policy. 
D)  the agreement will not be enforced by the courts because it obstructs the administration of justice. 
A)  Carl would probably win on the basis of promissory estoppel since he has detrimentally relied upon Ron's representation that he would not bid. 
B)  since Carl is less at fault than Ron, the court will likely award Carl damages. 
C)  the agreement will not be enforced by the courts because it violates public policy. 
D)  the agreement will not be enforced by the courts because it obstructs the administration of justice.

Question 12

Nell gives Big Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true?

Accepted Answer

A)  Nell can get the money back from Al through litigation. 
B)  Nell can get the money back and force Al to do as he promised. 
C)  Legally, Nell can neither get the money back nor force Al to do as he promised. 
D)  Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50. 
A)  Nell can get the money back from Al through litigation. 
B)  Nell can get the money back and force Al to do as he promised. 
C)  Legally, Nell can neither get the money back nor force Al to do as he promised. 
D)  Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.

Question 13

Bill is currently enrolled in law school. He expects to graduate and take the bar exam in order to be able to practice law. Before Bill becomes a lawyer, he promises to represent his friend, Tom, in a breach of contract action if Tom will pay him 25% of the settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.

Accepted Answer

A) True 
 B)False

Question 14

If a court finds a contract unconscionable:

Accepted Answer

A)  the court may refuse to enforce only the unconscionable part. 
B)  it must, in all states, be found both substantively and procedurally unconscionable to be unenforceable. 
C)  the court must refuse to enforce the contract. 
D)  the contract must fall strictly within the Code's or the Restatement's definition of "unconscionable" to be unenforceable. 
A)  the court may refuse to enforce only the unconscionable part. 
B)  it must, in all states, be found both substantively and procedurally unconscionable to be unenforceable. 
C)  the court must refuse to enforce the contract. 
D)  the contract must fall strictly within the Code's or the Restatement's definition of "unconscionable" to be unenforceable.

Question 15

The courts readily enforce a covenant not to compete during the period of employment.

Accepted Answer

A) True 
 B)False

Question 16

Abner operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

Accepted Answer

A)  in pari delicto . 
B)  partial illegality. 
C)  substantive unconscionability. 
D)  procedural unconscionability. 
A)  in pari delicto . 
B)  partial illegality. 
C)  substantive unconscionability. 
D)  procedural unconscionability.

Question 17

A(n) __________ is a measure designed to protect the public from unqualified practitioners.

Accepted Answer

A)  exculpatory clause 
B)  revenue license 
C)  regulatory license 
D)  usury statute 
A)  exculpatory clause 
B)  revenue license 
C)  regulatory license 
D)  usury statute

Question 18

Courts usually will require evidence for a transaction to be usurious. What factors will the courts require as evidence of usury?

Accepted Answer

For a transaction to be usurious, courts

Question 19

The law does not provide a remedy for the breach of an unenforceable agreement.

Accepted Answer

A) True 
 B)False

Question 20

The legal effect of a usurious loan varies from state to state.

Accepted Answer

A) True 
 B)False

Exam 13: Illegal Bargains

Archie bets his friend Jerry $100 that the Packers will win the next Super Bowl. This is an:

Delbert won a $500 bet with Samuel on the outcome of the World Series, but Samuel refuses to pay. Discuss what recourse Delbert has. If Delbert had instead bought a ticket from a state-operated lottery, would his recourse be different?

A contract that requires a person to commit a tort will be enforced by the courts.

An agreement to refrain from a particular trade, profession, or business is enforceable if:

Which of the following is NOT true with regard to an exculpatory clause?

Who usually enters into employment contracts and what provision is commonly included regarding possible restraint of trade? Explain the purpose of such provisions.

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or similar business for a period of twenty-five years would be unreasonable and unenforceable.

Nell gives Big Al $50 in return for Al's promise to defame Sara. Nell hopes to ruin Sara's chances at a promotion. Nell finds out that Al did not hold up his end of the agreement. Which of the following statements is true?

If a court finds a contract unconscionable:

The courts readily enforce a covenant not to compete during the period of employment.

A(n) __________ is a measure designed to protect the public from unqualified practitioners.

Courts usually will require evidence for a transaction to be usurious. What factors will the courts require as evidence of usury?

The law does not provide a remedy for the breach of an unenforceable agreement.

The legal effect of a usurious loan varies from state to state.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance Breach and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property Property Insurance Bailments and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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