Question 1

Specific lender usury statutes rather than the general usury statute generally apply to real estate mortgages and small consumer loans.

Accepted Answer

This is because usury statutes can vary by state, and some states have specific statutes that apply to certain types of loans, such as real estate mortgages and small consumer loans. These specific statutes may have different interest rate caps and other requirements than the general usury statute.

Question 2

Maximum rates of interest that are permitted under usury statutes are uniform from state to state.

Accepted Answer

Maximum rates of interest allowed under usury statutes vary from state to state. Each state has its own usury laws that set limits on the interest rates that can be charged for loans.

Question 3

A covenant not to compete is a type of restraint of trade that courts today will enforce under certain circumstances.

Accepted Answer

While the enforceability of a covenant not to compete varies by jurisdiction and specific circumstances, courts generally will enforce such a restraint of trade if it is reasonable in scope, duration, and geographic reach and serves a legitimate business interest of the employer.

Question 4

An exculpatory clause attempts to excuse one from liability for her own tortious conduct.

Accepted Answer

An exculpatory clause is a provision in a contract that attempts to limit or eliminate one's liability for their own actions, including tortious conduct. However, these clauses may not always be enforceable under the law, depending on the circumstances and jurisdiction.

Question 5

Stuart promises to act as a guide and fishing instructor on a trip for a group of visiting dignitaries.The dignitaries agree to pay him $200 for his services.Stuart completes his duties,but when they discover that Stuart does not have a fishing license,they refuse to pay him.The agreement between Stuart and the dignitaries is an illegal one,which is not enforceable.

Accepted Answer

The fact that Stuart does not have a fishing license does not make the agreement illegal. However, it may be a breach of law which can lead to legal actions against Stuart, such as a fine. The dignitaries may refuse to pay him based on this breach, but the agreement itself is still enforceable.

Question 6

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

Accepted Answer

Bargains or contracts that are against public policy are considered void and unenforceable, but not illegal. However, bargains that involve a crime or tort (such as a contract to commit murder) are not just against public policy but are also illegal.

Question 7

Regulation of gambling is solely under federal jurisdiction,through Congressional legislation and U.S.court enforcement.

Accepted Answer

While there are some federal laws regarding gambling (such as the Wire Act and the Unlawful Internet Gambling Enforcement Act), regulation of gambling is primarily the responsibility of the states. Each state has the ability to regulate and legalize various forms of gambling within their borders.

Question 8

Where a stipulation in restraint of trade is a part of the contract for the sale of a business,it may be valid if the restraint is within reasonable limitations to protect the business's goodwill.

Accepted Answer

This is a valid statement as per the common law doctrine of "restraint of trade". Such a restraint may be valid if it protects the reasonable interests and goodwill of the business being sold. However, if the restraint is too broad or unreasonable, it may be deemed unenforceable by the court.

Question 9

The Code and the Restatement both contain definitions of what constitutes "unconscionable" conduct.

Accepted Answer

The answer of The Code and the Restatement both contain...

Question 10

At common law,a valid contract may not be entered into on Sunday.

Accepted Answer

At common law, there is no general prohibition against entering into a contract on Sunday; contracts can be made on any day of the week, including Sundays, unless specifically prohibited by a statute or the contract involves activities that are illegal to perform on Sundays.

Question 11

A contract to commit a tort will be enforced by the courts.

Accepted Answer

Contracts to commit a tort are illegal and against public policy, and therefore cannot be enforced by the courts.

Question 12

The courts readily enforce a covenant not to compete during the period of employment.

Accepted Answer

Courts generally consider covenants not to compete during the period of employment to be reasonable and enforceable. This is because employers have a legitimate interest in protecting their confidential information and trade secrets, as well as retaining their clients and employees. However, if the covenant is too restrictive or extends beyond the termination of employment, it may not be enforceable.

Question 13

Noncompete agreements for Internet-based jobs have the same limitations in determining what is reasonable as to time and place restrictions as other types of jobs.

Accepted Answer

The answer of Noncompete agreements for Internet-based jobs have the...

Question 14

Many states impose no limit on the rate of interest which may be charged on loans to corporations.

Accepted Answer

This statement is true. While there are some states that have usury laws in place, which limit the interest rate that can be charged on loans to individuals, there are often no such restrictions on loans to corporations. This means that the interest rate on a loan to a corporation can be negotiated and agreed upon between the lender and the borrower, with no legal limitations.

Question 15

An adhesion contract is offered on a "take-it-or-leave-it" basis.

Accepted Answer

An adhesion contract is typically written by one party (such as a business or employer) and presented to the other party (such as a consumer or employee) on a "take-it-or-leave-it" basis, with little room for negotiation or changes to the terms of the agreement.

Question 16

As a general rule,illegal contracts are unenforceable and neither party can successfully sue the other for breach or recover for any performance rendered.

Accepted Answer

This is a well-established principle in contract law. Illegal contracts are often considered void ab initio, meaning they were never legally valid in the first place. As a result, neither party can enforce them, and any performance rendered cannot give rise to a cause of action.

Question 17

Although wagering is generally illegal,some states permit certain kinds of regulated gambling,especially wagering conducted by governmental agencies.

Accepted Answer

Some states do permit certain forms of regulated gambling, such as lotteries and horse racing, which are often conducted by governmental agencies.

Question 18

Finn is currently enrolled in law school.He expects to graduate and take the bar exam in order to be able to practice law.Before Finn becomes a lawyer,he promises to represent his friend,Landon,in a breach of contract action if Landon will pay him 25% of the settlement.Finn negotiates and the case settles for $50,000.Landon refuses to pay Finn.Finn then graduates and attempts to sue Landon.Finn has a legal right to enforce the agreement.

Accepted Answer

Finn's agreement with Landon violates the model rules of professional responsibility, which prohibit a lawyer from entering into a contingent fee agreement for representing a client in a criminal case. Therefore, Finn has no legal right to enforce the agreement.

Question 19

An exculpatory clause excusing a party from liability for harm caused by reckless conduct will generally make a contract unenforceable as a violation of public policy.

Accepted Answer

Exculpatory clauses that excuse a party from liability for reckless conduct are generally considered against public policy and therefore unenforceable.

Question 20

The term "public policy" is precisely and narrowly defined in the Restatement.

Accepted Answer

The term "public policy" is not precisely and narrowly defined in the Restatement; it is a broad concept that refers to principles and standards regarded as being of fundamental concern to the state and the whole of society.

Quiz 13: Illegal Bargains