Question 1

If a contract appears to be legal on its face,it will be enforceable even if it was entered into for an illegal purpose.

Accepted Answer

A) True 
 B)False

Question 2

An unlicensed insurance broker who cannot personally recover a fee because of the absence of a license can effectively circumvent the statutory requirements by having a friend who is a licensed broker bill for the services and collect the payment for him.

Accepted Answer

A) True 
 B)False

Question 3

Agreements that are illegal 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 4

Legislation commonly requires that an installment-sale contract specify the cash price,down payment,finance charges,and insurance costs.

Accepted Answer

A) True 
 B)False

Question 5

When an agreement is illegal,parties are usually not entitled to help from the courts.

Accepted Answer

A) True 
 B)False

Question 6

Dealing honestly,reasonably,and in good faith:

Accepted Answer

A) is implied in every contract for services. 
B) is implied in every contract for the sale of goods. 
C) is an expressed obligation in every contract. 
D)  both a and 
A) is implied in every contract for services. 
B) is implied in every contract for the sale of goods. 
C) is an expressed obligation in every contract. 
D)  both a and

Question 7

A provision in a contract that gives what the court believes is too much of an advantage over a buyer may be held void as unconscionable.

Accepted Answer

A) True 
 B)False

Question 8

An agreement between Jim and his 18-year-old daughter,Betty,provides that he will give her $25,000 if she does not marry until after her 22nd birthday.One month after reaching the age of 22,Betty,still unmarried,claims the $25,000.
Jim refuses to pay,claiming that the agreement was illegal.Is Jim correct?

Accepted Answer

No.Judgment will be for Betty.It is the

Question 9

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.

Question 10

An agreement to slander a third person would not be enforceable because slander is a(n):

Accepted Answer

A) crime. 
B) civil wrong. 
C) infringement of privacy. 
D) assault. 
A) crime. 
B) civil wrong. 
C) infringement of privacy. 
D) assault.

Question 11

The failure to have a license will not render agreements void if the license:

Accepted Answer

A) is based on formal education 
B) is required for engaging in a particular business or trade 
C) is a regulatory license 
D) is readily obtainable by anyone who offers payment of a required fee 
A) is based on formal education 
B) is required for engaging in a particular business or trade 
C) is a regulatory license 
D) is readily obtainable by anyone who offers payment of a required fee

Question 12

An agreement is illegal when either its formation or performance is a crime or a tort,or it is contrary to public policy.

Accepted Answer

A) True 
 B)False

Question 13

To stabilize the industry,manufacturers of the same or similar products may agree that each will market its product in a specified geographic area of the country and will not market its product in the territory assigned to other manufacturers.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If an illegal agreement has already been performed parties can sue for damages.

Accepted Answer

A) True 
 B)False

Question 17

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.

Question 18

In the case of an illegal contract,both parties usually are prohibited from seeking relief in the courts:

Accepted Answer

A) if the illegal contract has not been performed. 
B) if the contract has been partially performed. 
C) if the contract has been fully performed. 
D) all of the above. 
A) if the illegal contract has not been performed. 
B) if the contract has been partially performed. 
C) if the contract has been fully performed. 
D) all of the above.

Question 19

An unlicensed doctor can sue a patient for the doctor's fee if the patient in fact recovered because of the doctor's care.

Accepted Answer

A) True 
 B)False

Question 20

Fees charged by a lender for the reasonable expense of making a loan,such as the cost of appraising property,are treated as interest for purposes of the usury law.

Accepted Answer

A) True 
 B)False

Exam 16: Legality and Public Policy

If a contract appears to be legal on its face,it will be enforceable even if it was entered into for an illegal purpose.

An unlicensed insurance broker who cannot personally recover a fee because of the absence of a license can effectively circumvent the statutory requirements by having a friend who is a licensed broker bill for the services and collect the payment for him.

Agreements that are illegal are:

Legislation commonly requires that an installment-sale contract specify the cash price,down payment,finance charges,and insurance costs.

When an agreement is illegal,parties are usually not entitled to help from the courts.

Dealing honestly,reasonably,and in good faith:

A provision in a contract that gives what the court believes is too much of an advantage over a buyer may be held void as unconscionable.

The validity of a contract is not affected by:

An agreement to slander a third person would not be enforceable because slander is a(n):

The failure to have a license will not render agreements void if the license:

An agreement is illegal when either its formation or performance is a crime or a tort,or it is contrary to public policy.

To stabilize the industry,manufacturers of the same or similar products may agree that each will market its product in a specified geographic area of the country and will not market its product in the territory assigned to other manufacturers.

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

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

If an illegal agreement has already been performed parties can sue for damages.

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

In the case of an illegal contract,both parties usually are prohibited from seeking relief in the courts:

An unlicensed doctor can sue a patient for the doctor's fee if the patient in fact recovered because of the doctor's care.

Fees charged by a lender for the reasonable expense of making a loan,such as the cost of appraising property,are treated as interest for purposes of the usury law.

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

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

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 Instruments, parties, 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