Question 1

In order to be enforceable,a covenant not to compete must be ancillary to a legitimate employment contract or contract for the sale of a business.

Accepted Answer

A covenant not to compete is only enforceable if it is ancillary to a legitimate employment contract or contract for the sale of a business. If it is not ancillary, it may be considered a restraint of trade and therefore unenforceable.

Question 2

Common law defines minors as ________.
A) males and females under the age of 18
B) females under the age of 18 and males under the age of 21
C) males under the age of 18 and females under the age of 21
D) males and females under the age of 21
E) males and females under the age of 25.

Accepted Answer

Common law defines minors as females under the age of 18 and males under the age of 21.

Question 3

Exculpatory clauses often are found illegal because they violate state statutes.

Accepted Answer

The answer of Exculpatory clauses often are found illegal because...

Question 4

A non-compete agreement will not be found to violate public policy so long as it meets the required tests for reasonableness.

Accepted Answer

A non-compete agreement can be enforceable if it is deemed reasonable in scope, duration, and geographic area. If it is overly restrictive and prevents an individual from pursuing their livelihood or is against public policy, it will be deemed unenforceable.

Question 5

If a court finds that a contract clause is unconscionable,it may limit the applicability of the unconscionable clause so as to avoid an unconscionable result.

Accepted Answer

This is true. Courts have the power to strike down or modify unconscionable contract clauses to prevent unfair or overly harsh outcomes. The court may limit the clause in question or even strike it down entirely, while still enforcing the rest of the contract.

Question 6

Licensing statutes enacted to raise money for the government are called extractive statutes.

Accepted Answer

The answer of Licensing statutes enacted to raise money for...

Question 7

A person who provides contract services without the appropriate license required by a revenue-raising statute cannot enforce the contract or recover payment for services rendered pursuant to the contract.

Accepted Answer

The answer of A person who provides contract services without...

Question 8

If a court finds that a contract or contract clause is unconscionable,it may refuse to enforce the entire contract.

Accepted Answer

When a court finds a contract or clause to be unconscionable, it can declare the whole contract, or just the offending clause, unenforceable. This is because unconscionability renders the contract fundamentally unfair or oppressive, depriving one party of any real choice or bargaining power. Refusing to enforce the contract or clause allows the court to rectify these imbalances and protect the interests of the disadvantaged party.

Question 9

At common law,contracts in restraint of trade are deemed unlawful.

Accepted Answer

At common law, contracts in restraint of trade are considered against public policy and are therefore deemed unlawful.

Question 10

An exculpatory clause is not valid if one,but not the other,party is released from liability for negligence.

Accepted Answer

An exculpatory clause can be invalid if it attempts to release a party from liability for their own negligence, but it can still be valid if it only releases one party from liability while holding the other party responsible for their own negligence.

Question 11

A person who is aware that a hired contractor is unlicensed but allows the contractor to continue working is in all cases barred under equitable principles from raising a claim regarding the lack of licensure to avoid payment.

Accepted Answer

Equitable principles, such as estoppel, may prevent a person from raising a claim about a contractor's lack of licensure to avoid payment if they knowingly allowed the work to continue. However, this is not an absolute rule and can depend on the specific circumstances and jurisdiction.

Question 12

All states have licensing statutes that require members of certain professions and occupations to be licensed by the state in which they practice.

Accepted Answer

This statement is true. States have licensing statutes to ensure certain professions and occupations meet certain standards and qualifications before they are allowed to practice in the state. This is done to protect public health, safety, and welfare. Examples of licensed professions include doctors, lawyers, architects, and cosmetologists.

Question 13

If a court finds that a contract clause is unconscionable,it may refuse to enforce the unconscionable clause but enforce the remainder of the contract.

Accepted Answer

This is a valid statement. When a court finds a contract clause unconscionable, it may strike the clause and enforce the rest of the contract if possible. This is to ensure that the parties' intentions are preserved, while also safeguarding against unfair contractual terms.

Question 14

Licensing statutes enacted to protect the public are called in loco parentis statutes.

Accepted Answer

In loco parentis refers to a legal doctrine that allows someone to act in the place of a parent. Licensing statutes enacted to protect the public are typically referred to as regulatory or licensing statutes.

Question 15

The doctrine of unconscionability is based on public policy.

Accepted Answer

The doctrine of unconscionability is based on public policy considerations because it is designed to protect parties from entering into unfair and unjust agreements. This public policy seeks to ensure that parties have a meaningful opportunity to understand and negotiate the terms of a contract and that those terms are not so one-sided as to be unconscionable.

Question 16

In all states exculpatory contracts are void as to minors.

Accepted Answer

The answer of In all states exculpatory contracts are void...

Question 17

Most adhesion contracts are lawful even though there is a disparity in the power of contracting.

Accepted Answer

Adhesion contracts are standard form contracts that are offered on a take-it-or-leave-it basis where the party with more bargaining power sets the terms. Although there is a disparity in the power of contracting, most adhesion contracts are still considered lawful as long as they do not violate any laws or public policy. However, there are instances where certain provisions in adhesion contracts may be deemed unenforceable if they are found to be unconscionable.

Question 18

Generally,unlicensed persons cannot recover payments for services that a regulatory statute requires a licensed person to provide.

Accepted Answer

This is because regulatory statutes are put in place to ensure that only licensed professionals are able to provide certain services, and unlicensed persons are not eligible to receive payment for services that are restricted to licensed professionals.

Question 19

Any contract in which the parties possessed severely unequal bargaining power is an unconscionable contract.

Accepted Answer

Unequal bargaining power alone does not make a contract unconscionable; it must also be unfairly one-sided or oppressive.

Question 20

Automobile sales contracts are usually contracts of adhesion.

Accepted Answer

Automobile sales contracts are typically standardized contracts created by the dealership or manufacturer, which are offered to buyers on a take-it-or-leave-it basis without significant opportunity for negotiation or modification. Therefore, they are considered contracts of adhesion.

Quiz 11: Capacity and Legality