Question 1

All states allow certain forms of gambling.

Accepted Answer

A) True 
 B)False  False

Question 2

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. 
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. A

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

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 5

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

Accepted Answer

A) True 
 B)False

Question 6

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. 
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.

Question 7

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

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Traditionally, the states considered gambling contracts legal and enforceable.

Accepted Answer

A) True 
 B)False

Question 10

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 11

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. 
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.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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. 
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.

Question 15

All states require members of certain professions to have licenses.

Accepted Answer

A) True 
 B)False

Question 16

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. 
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.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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. 
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.

Question 19

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. 
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.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 12: The Legality of Agreements

All states allow certain forms of gambling.

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

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

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.

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

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

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

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

Traditionally, the states considered gambling contracts legal and enforceable.

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

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

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

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

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

All states require members of certain professions to have licenses.

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

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

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

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

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

Introduction to the Law

Ethics in Business

The Courts and Our Legal System

Constitutional Law

Business Torts

Intellectual Property

Business Crimes

Introduction to Contracts

Offer and Acceptance

Consideration

Capacity

Voluntary Consent

Written Contracts

Third Party Rights

Termination and Remedies

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Negotiable Instruments: Transfer and Liability

Banking in the Digital Age

Agency Relationships

Employment, Immigration, and Labor Law

Employment Discrimination

Types of Business Organizations

Formation and Ownership of a Corporation

Management of a Corporation

Combining and Dissolving a Corporation

Credit and Security

Mortgages

Bankruptcy

Insurance

Personal Property

Bailments

Real Property

Landlord and Tenant Law

Wills and Trusts

Administrative Law

Antitrust Law

International and Space Law

Filters