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Exam 13: Illegal Bargains

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Question 21

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R&R, Inc. entered into a contract with Scott, an agent, under the terms of which Scott would receive $20,000 if he stole trade secrets from the leading competitor of R&R. Scott performed his end of the agreement by delivering the trade secrets. If R&R now refuses to pay Scott for his services, Scott:

A) may recover based upon the express contract of the parties.
B) may recover based upon a quasi-contractual theory in order to prevent the unjust enrichment of R&R.
C) will be unable to recover, because this is an illegal contract.
D) will be able to recover based upon promissory estoppel, because he has detrimentally relied upon the promises made by R&R.

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Question 22

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Courts require that for a contract to be unenforceable based on unconscionability, both substantive and procedural unconscionability must be equally present.

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Question 23

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Which of the following is true with regard to an exculpatory clause?

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:

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

William recently sold his successful business to Janice. The contract for the sale contained an unreasonable restriction that did not allow William to open a similar business for fifteen years. In this instance, the courts would likely:

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

The courts will enforce an agreement declared illegal by statute.

Sarah is working hard on the mayoral campaign of Timothy. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 to register and vote. Violet does so, but Timothy loses the election, and Sarah now refuses to pay. The agreement is:

What does it mean that an agreement is void because it violates public policy? a. Explain the meaning of "public policy" in this context. b. List the most common forms of agreements that violate public policy. _{Judicially declared public policy is very broad in scope, it often being said that}

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

An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are met: that it protects a property interest of the promisee and that the restraint is no more extensive than is reasonably necessary to protect that interest.

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

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

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:

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

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. Stu completes his duties, but when they discover that Stu does not have a fishing license, they refuse to pay him. The agreement between Stu and the dignitaries is an illegal one, which is not enforceable.

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

John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or a similar business for a period of twenty-five years would be unreasonable.