Question 1

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

This is a true statement in contract law. An agreement can be deemed illegal if it violates criminal law, tort law or if it is against public policy.

Question 2

When a court finds a clause of a contract unconscionable at the time it was made,it may enforce the remainder of the contract.

Accepted Answer

This is a legal principle known as "severance." If a court finds that one part of a contract is unconscionable (i.e. extremely unfair or one-sided), it may strike that part of the contract and still enforce the rest of the agreement. This is intended to prevent the unfair party from benefiting from their unfair clause while still allowing the parties to uphold the parts of the contract that are fair and reasonable.

Question 3

Substantive unconscionability has to do with matters of freedom of assent.

Accepted Answer

Substantive unconscionability relates to the fairness of the terms of a contract, not to the freedom of assent, which is more closely related to procedural unconscionability.

Question 4

When parties are not equally guilty,the least guilty party is granted relief when it is in the public interest.

Accepted Answer

This statement is referring to the legal concept of comparative fault or contributory negligence, which allows a court to apportion fault between multiple parties in a lawsuit. If one party is found to be less at fault than the other party, they may be granted relief, such as reduced damages or a lower percentage of liability. This is done in the interest of fairness and justice, as well as to ensure that the public is protected from harm.

Question 5

If a contract can be interpreted in two ways,one legal and the other illegal,the court will assume that the legal meaning was intended unless the contrary is clearly indicated.

Accepted Answer

This is because courts generally presume parties to a contract intended to create a legal agreement, and will not enforce agreements that are illegal or against public policy. Therefore, if a contract can reasonably be interpreted in both a legal and illegal way, the court will assume the legal interpretation was intended, unless there is clear evidence to the contrary.

Question 6

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

Contracts that are entered into for an illegal purpose are generally not enforceable, regardless of whether they appear legal on their face.

Question 7

Courts are quick to invalidate contracts on the ground that they are contrary to public policy because such contracts are so offensive to society.

Accepted Answer

The answer of Courts are quick to invalidate contracts on...

Question 8

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

Accepted Answer

A contract that calls for the commission of a civil wrong, such as fraud or breach of contract, is against public policy and therefore illegal and unenforceable in court.

Question 9

In every contract there exists an expressed covenant of good faith and fair dealing.

Accepted Answer

The answer of In every contract there exists an expressed...

Question 10

Even if part of a contract is illegal,the court may enforce a divisible,legal part of the contract.

Accepted Answer

This is known as the doctrine of severability or the doctrine of separability, which allows courts to enforce the legal portion of a contract even if part of it is deemed illegal or unenforceable.

Question 11

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

Accepted Answer

It is not the court's role to decide whether a contract is fair or unfair, but rather to enforce the terms of the contract as long as they are legally valid. Exceptions may exist in cases of unconscionable contracts or where there is a relevant law or public policy at issue.

Question 12

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

An unlicensed doctor practicing medicine is committing a crime in most jurisdictions, and thus cannot legally enforce a contract for medical services rendered, as the contract itself would be considered void due to the illegal nature of the services provided.

Question 13

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

Accepted Answer

The answer of If an illegal agreement has already been...

Question 14

Companywide standardized form contracts imposed on a "take-it-or-leave it" basis by a party with superior bargaining strength are called contracts of collusion.

Accepted Answer

The correct term for this type of contract is "contracts of adhesion" or "standard form contracts." Collusion refers to an agreement between two or more parties to engage in wrongful or illegal behavior.

Question 15

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

Accepted Answer

This statement is true. Legislation such as the Truth in Lending Act and Consumer Leasing Act require certain disclosures in installment sale contracts, including the cash price, down payment, finance charges, and insurance costs. These disclosures help ensure that consumers have a clear understanding of the costs associated with the sale and financing of the purchase.

Question 16

Agreements that are contrary to public policy are not binding.

Accepted Answer

This is a basic principle in contract law. Agreements that go against public policy, such as contracts that encourage illegal activities or fraud, are considered unenforceable.

Question 17

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

This is true. Unconscionability refers to a situation where a party has an undue advantage or bargaining power over the other party, and the resulting terms are so one-sided that they are considered oppressive or overly harsh. Contracts that contain unconscionable clauses may be held void or unenforceable by a court.

Question 18

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

Accepted Answer

When an agreement is illegal, it means that it goes against the law and therefore cannot be enforced by the courts. Parties involved in an illegal agreement are not entitled to help or protection from the courts.

Question 19

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

The answer of To stabilize the industry,manufacturers of the same...

Question 20

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

This practice is known as "ghost brokering" and is illegal. A licensed broker cannot bill for services they did not provide, and if caught, both brokers could face legal consequences.

Quiz 16: Legality and Public Policy