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Exam 13: Illegal Bargains

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Question 1

Multiple Choice

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A(n) is a measure designed to protect the public from unqualified practitioners.

A) exculpatory clause
B) revenue license
C) regulatory license
D) usury statute

E) B) and C)
F) None of the above

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Question 2

Multiple Choice

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Which of the following would always be considered to be contrary to public policy?

A) A contract which contains a covenant not to compete
B) A contract offered on a take-it-or-leave-it basis
C) An agreement to pay someone to make false, negative statements about a competitor's product
D) An agreement which contains an exculpatory clause

E) B) and C)
F) A) and D)

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Question 3

Essay

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Define "unconscionability" and distinguish between procedural and substantive unconscionability.

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

One type of restraint of trade is a covenant not to compete.

Which of the following would generally be considered to be a revenue-raising licensing law?

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

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

Andrew owns a store in Polk County.His trade extends throughout River City, but not beyond the county limits.He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years.The agreement:

Don has an employment contract with Dunkirk Ice Cream.He sells ice cream and novelty ice cream products.He has nine children and doesn't make enough money, so he decides to see if another dairy will hire him, too."After all," he reasons, "most stores carry four or five different brands." His employment contract prohibits him from competing.If Don sells for another dairy in addition to Dunkirk, will he be in trouble under his contract?

Deanna, an attorney, has a personal injury case which is set for trial next week.She needs a good doctor to testify on behalf of her client, so she contacts Dr.Dogood who agrees to testify on behalf of Deanna's client at the trial.In return for Dr.Dogood's testimony, Deanna agrees to pay Dr.Dogood $10,000 if they win the case, and $5,000 if they lose.Dr.Dogood agrees.The agreement between Deanna and Dr.Dogood is unenforceable.

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

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

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

Edward, an engineer, is working on a new design for some highly technical equipment which XYZ, Inc.hopes to market within the next five years.The employment agreement between Edward and XYZ states that Edward will not go to work for another company in the same business for a period of two years after termination of his employment with XYZ, Inc.This agreement is void and unenforceable, because it would make it difficult for Edward to find other employment.

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

Claudia sells her highly successful hair salon to Carl.In the sales contract, Claudia agrees never to open a hair salon in the state.Which of the following best describes this contract clause?

Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is:

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

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