Question 1

If the law is intended to protect one of the parties to an otherwise illegal contract, that party may seek relief in court.

Accepted Answer

A) True 
 B)False  True

Question 2

The validity of a contract is not affected by:

Accepted Answer

A)  the effect of the contract on the community. 
B)  unconscionability. 
C)  the absence of good faith. 
D)  the fact that the contract turned out to be a bad bargain for one of the parties. 
A)  the effect of the contract on the community. 
B)  unconscionability. 
C)  the absence of good faith. 
D)  the fact that the contract turned out to be a bad bargain for one of the parties. D

Question 3

Private lotteries, which generally are held to be illegal, involve three elements:

Accepted Answer

A)  prize, chance, and consideration. 
B)  return, skill, and wager. 
C)  prize, skill, and consideration. 
D)  attractive return, minimal involvement, and skill. 
A)  prize, chance, and consideration. 
B)  return, skill, and wager. 
C)  prize, skill, and consideration. 
D)  attractive return, minimal involvement, and skill. A

Question 4

Illegal agreements are:

Accepted Answer

A)  enforceable if one party acted in good faith. 
B)  voidable by one of the parties. 
C)  void. 
D)  voidable by either party. 
A)  enforceable if one party acted in good faith. 
B)  voidable by one of the parties. 
C)  void. 
D)  voidable by either party.

Question 5

Agreements not to compete are always void.

Accepted Answer

A) True 
 B)False

Question 6

Public policy:

Accepted Answer

A)  can be precisely defined 
B)  is frequently used by the courts as a reason to invalidate contracts 
C)  is protections from that which violates any established interest of society 
D)  is policy that is made during a trial. 
A)  can be precisely defined 
B)  is frequently used by the courts as a reason to invalidate contracts 
C)  is protections from that which violates any established interest of society 
D)  is policy that is made during a trial.

Question 7

An agreement may involve the performance of several promises, some of which are illegal and some legal.

Accepted Answer

A) True 
 B)False

Question 8

An agreement that calls for the commission of a civil wrong is illegal and void.

Accepted Answer

A) True 
 B)False

Question 9

An agreement not to compete is enforceable:

Accepted Answer

A)  in the sale of a business. 
B)  between competitors. 
C)  in contracts for the sale of goods. 
D)  in contracts for the sale of securities. 
A)  in the sale of a business. 
B)  between competitors. 
C)  in contracts for the sale of goods. 
D)  in contracts for the sale of securities.

Question 10

Ordinarily, a court will not consider whether a contract is fair or unfair.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not illegal?

Accepted Answer

A)  an office football "pool" with a cash entry fee and cash prize 
B)  a raffle with an entry fee to win a car 
C)  a "giveaway" to every tenth person who buys meat at a butcher shop 
D)  a "giveaway" to every tenth person entering a department store 
A)  an office football "pool" with a cash entry fee and cash prize 
B)  a raffle with an entry fee to win a car 
C)  a "giveaway" to every tenth person who buys meat at a butcher shop 
D)  a "giveaway" to every tenth person entering a department store

Question 12

When parties are not in pari delicto, the least guilty party is granted relief when it is in the public interest.

Accepted Answer

A) True 
 B)False

Question 13

Art and Mary were good friends who went through high school and college together. Art eventually became a college philosophy professor and Mary went into the business world. Mary became a senior vice-president of a management firm and learned many of the company's trade secrets. Both Art and Mary signed one-year contracts with their respective employers. The contracts contained clauses that provided that they would not compete against their former employers for a period of one year after leaving their jobs. The area covered by the restrictions for both Art and Mary was a radius of 500 miles from the place of employment.?Both Art and Mary resigned and within two months took other jobs. Art went to work for another college 50 miles away, teaching philosophy. Mary took a job 75 miles from her former employment. Her new position was similar to her former job. The former employers sued to enforce the anticompetitive covenants in the original contracts. Discuss the probable outcome of the lawsuits.

Accepted Answer

The case against Art, the professor, wil

Question 14

A noncompetition covenant may be held invalid because of vagueness concerning the duration and geographic area of the restriction.

Accepted Answer

A) True 
 B)False

Question 15

A(n) _______ contract is a take-it-or-leave-it contract that is unenforceable because it is deemed to be too harsh or oppressive to one of the contracting parties.

Accepted Answer

A)  unilateral influence 
B)  bilateral influence 
C)  adhesion 
D)  non-compete 
A)  unilateral influence 
B)  bilateral influence 
C)  adhesion 
D)  non-compete

Question 16

Which party to an illegal agreement may get relief from the court?

Accepted Answer

A)  Plaintiff 
B)  Defendant 
C)  the less-guilty party, when public interest is advanced by granting relief 
D)  a doctor who was unlicensed at the time of the making of an agreement for the provision of medical services, but who later obtained a proper license 
A)  Plaintiff 
B)  Defendant 
C)  the less-guilty party, when public interest is advanced by granting relief 
D)  a doctor who was unlicensed at the time of the making of an agreement for the provision of medical services, but who later obtained a proper license

Question 17

Even if a contract appears legal on its face, it may be unenforceable if:

Accepted Answer

A)  the illegal contract has not been performed. 
B)  the contract has been partially performed. 
C)  the contract has been fully performed. 
D)  the contract has an illegal purpose. 
A)  the illegal contract has not been performed. 
B)  the contract has been partially performed. 
C)  the contract has been fully performed. 
D)  the contract has an illegal purpose.

Question 18

An illegal provision in a contract:

Accepted Answer

A)  causes the entire contract to be void. 
B)  causes the entire contract to be rescinded. 
C)  can be ignored by the parties in their performance of the remaining legal provisions of the contract. 
D)  can be ignored by the parties, because an illegal provision in a contract is not deemed substantial. 
A)  causes the entire contract to be void. 
B)  causes the entire contract to be rescinded. 
C)  can be ignored by the parties in their performance of the remaining legal provisions of the contract. 
D)  can be ignored by the parties, because an illegal provision in a contract is not deemed substantial.

Question 19

In most states the usury laws apply to loans made to both individuals and corporations.

Accepted Answer

A) True 
 B)False

Question 20

Dealing honestly, reasonably, and in good faith means all the following except:

Accepted Answer

A)  these are implied duties in every contract for services. 
B)  these are implied duties in every contract for the sale of goods. 
C)  the parties will not injure each other. 
D)  these are express duties in every contract for services. 
A)  these are implied duties in every contract for services. 
B)  these are implied duties in every contract for the sale of goods. 
C)  the parties will not injure each other. 
D)  these are express duties in every contract for services.

Exam 15: Legality and Public Policy

If the law is intended to protect one of the parties to an otherwise illegal contract, that party may seek relief in court.

The validity of a contract is not affected by:

Private lotteries, which generally are held to be illegal, involve three elements:

Illegal agreements are:

Agreements not to compete are always void.

Public policy:

An agreement may involve the performance of several promises, some of which are illegal and some legal.

An agreement that calls for the commission of a civil wrong is illegal and void.

An agreement not to compete is enforceable:

Ordinarily, a court will not consider whether a contract is fair or unfair.

Which of the following is not illegal?

When parties are not in pari delicto, the least guilty party is granted relief when it is in the public interest.

A noncompetition covenant may be held invalid because of vagueness concerning the duration and geographic area of the restriction.

A(n) _______ contract is a take-it-or-leave-it contract that is unenforceable because it is deemed to be too harsh or oppressive to one of the contracting parties.

Which party to an illegal agreement may get relief from the court?

Even if a contract appears legal on its face, it may be unenforceable if:

An illegal provision in a contract:

In most states the usury laws apply to loans made to both individuals and corporations.

Dealing honestly, reasonably, and in good faith means all the following except:

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters