Deck 10: Illegal Agreements

Question 1

The legal rate of interest is a rate:

A) that is higher than the contract rate.
B) at which no interest is charged.
C) that is over and above the rate that is lawfully allowed.
D) that is applied when no rate is specified.

Answer 1

D

Question 2

The courts may sometimes allow a wrongdoer to enforce a contract against an innocent party.

Answer 2

False

Question 3

If a druggist sells morphine to one who does not have a prescription, a suit to collect the price would  be successful.

Answer 3

False

Question 4

Which of the following is true of Sunday contracts?

A) They are universal across states.
B) Judicial interpretation has had no impact on their formulation.
C) Their laws are a result of statutes.
D) They make it mandatory to prosecute all violators of such contracts.

Question 5

Contracts which are designed to limit competition are acceptable by law.

Question 6

A Sunday contract is declared legal by statute.

Question 7

Which of the following is true of usury laws?

A) They limit the rate of interest that may be charged for the use of money.
B) They prohibit certain businesses and professions from operating without a license.
C) They charge violators a penalty that is universal across all states.
D) They restrict the sale of prohibited articles within a state.

Question 8

Which of the following is an example of a contract contrary to public policy?

A) A purchases a motorcycle from B at a price much lower than its real value.
B) A agrees to sell 1000 tonnes of rice to the local government.
C) A agrees to appoint B as sheriff, provided he helps him win the local elections.
D) A agrees to give $100 to B if he wins the lottery.

Question 9

In which of the following situations is a state most likely to enforce a usury law?

A) X purchases two crates of liquor from a minor.
B) X sells a plot of land at a rate higher than the maximum contract rate.
C) X sends two boxes of unapproved medicines to children in Africa.
D) X charges a very high rate of interest on money borrowed by Y.

Question 10

A person who sells alcoholic beverages to a minor when such a sale is prohibited can recover on the contract.

Question 11

An agreement not to marry during minority is invalid.

Question 12

Which of the following is true of gambling contracts?

A) They allow the court to authorize one party to recover damages from another for breach of a gambling debt.
B) They are contracts in which both parties in the contract either win or lose.
C) They allow the state to permit the stakeholder, who is a trustee of funds, to keep the money.
D) They are transactions wherein the parties stand to win or to lose based on pure chance.

Question 13

Under the _____, it is unlawful to discriminate in price between competing buyers if the goods are of like grade, quantity, and quality.

A) Revenue Act of 1936
B) Walsh-Healey Act
C) Robinson-Patman Act
D) Hatch Act of 1939

Question 14

Contracts obstructing the administration of justice are unenforceable.

Question 15

What are some of the contracts that are contrary to public policy? Describe any two contracts.

Question 16

A dentist who performs services without a license is entitled to sue to collect for the services.

Question 17

The legal contract rate is the highest rate that may be charged according to usury laws.

Question 18

Which of the following is true of contracts that limit the freedom of marriage?

A) An agreement where one party promises never to marry is held valid.
B) An agreement not to marry during minority is valid.
C) A marriage brokerage contract is enforceable by law.
D) An agreement to refrain from marrying for a definite time period is invariably valid.

Question 19

A contract is indivisible if it can be performed in ways other than as an entity.

Question 20

All contracts must be for a lawful purpose otherwise they would be considered void.