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Exam 13: Illegal Bargains

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Question 31

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If a court finds a contract unconscionable:

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.

E) None of the above
F) B) and D)

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Question 32

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Distinguish between procedural and substantive unconscionability.

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Procedural unconscionability involves sc...

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Question 33

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Which of the following would always be considered to be contrary to public policy?

Nanette wanted to purchase a new car and found one she liked at Minson Motors.Several important contractual terms were buried in the written agreement and some of the meaning of the contract was obscured by legal jargon.The contract involved:

Which of the following would generally be considered to be a revenue-raising licensing law?

Carlos owns a store in Polk County.His trade extends throughout River City,but not beyond the county limits.He sells his store to Virginia and,as part of the transaction,agrees not to engage in the same business anywhere in River City for a period of two years.In this case:

Philip has been in training for several months and now plans to run in the school-sponsored,10-mile,fun-run mini-marathon.He completes and signs an entry blank which contains the statement,"I hereby agree to hold the sponsors harmless for any injury sustained as a result of participation in this event no matter how such injury may be caused." a.What is the legal term for this clause in the agreement? b.Is the clause valid and legally enforceable? Explain its legal effect.

Where parties to a failed agreement are in pari delicto,a court will provide a remedy to the injured party.

An agreement for the purchase of an illegal substance will be enforced by the courts if all other elements of the contract are present.

B& B,Inc.pays an attorney to draft and lobby for a bill which will greatly lessen B & B's tax liability to the state and federal governments.B&B gives the attorney $20,000 in cash to pay legislators for taking the time to listen to him.This is an agreement which is a violation of public policy.

An agreement to refrain from a particular trade,profession,or business is enforceable if two requirements are met: that the purpose of the restraint is to protect a property interest of the promisee and the restraint is no more extensive than is reasonably necessary to protect that interest.

What is the legal effect of an agreement that is criminal,tortious,or otherwise contrary to public policy,and why does it have that effect?

Many states impose no limit on the rate of interest that may be charged:

Bargains are illegal if they violate a crime or tort but not if they are merely against public policy.

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:

Which of the following is true with regard to an exculpatory clause?

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

An agreement to pay a public officer something extra for performing his official duty is enforceable.

American courts generally will enforce a gambling agreement.

Don has an employment contract with Dunkirk Ice Cream.He sells ice cream and novelty ice cream products.He has nine children and doesn't make enough money,so he decides to see if another dairy will hire him,too."After all," he reasons,"most stores carry four or five different brands." His employment contract prohibits him from competing.If Don sells for another dairy in addition to Dunkirk,will he be in trouble under his contract?