Farmland County Bank offers to lend money to Gino,the owner of Home Hardware Store,at 15 percent interest.Before Gino accepts,a state statute is enacted prohibiting loans at rates greater than 12 percent.Gino and the bank have

Question

Quizplus · Accepted Answer

The state statute prohibiting loans at rates greater than 12 percent overrides the previous agreement between Gino and the bank for a loan at 15 percent interest. Therefore, there is no contract for a loan at either 15 or 12 percent interest. The parties may choose to renegotiate the terms of the loan at the new legal rate of 12 percent.

Farmland County Bank Offers to Lend Money to Gino,the Owner