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Bus Law Chap 13

Terms in this set (10)

The ________ is made unenforceable to discourage undesirable conduct and to preclude the inappropriate use of the judicial process in carrying out socially undesirable bargains.
illegal bargain
Correct. The illegal bargain is made unenforceable to discourage undesirable conduct and to preclude the inappropriate use of the judicial process in carrying out socially undesirable bargains. (Introduction)
Which of the following would generally be considered to be a revenue-raising licensing law?
A statute requiring that salespeople be licensed, but not establishing any educational or training requirements.
Correct. Salespeople usually do not need to pass government standard exams related to protecting public safety. This is most likely a statute to raise money for state expenditures. (Violations of Statutes)
Blue Laws, the legislations present in a few states, belong to which of the following statutes?
Sunday Statutes
Correct. Some states have legislation, referred to as Blue Laws, modifying the common law rule and prohibiting certain types of commercial activity on Sunday. (Violations of Statutes)
A ________ is a law establishing a maximum rate of permissible interest for which a lender and borrower of money may contract.
Usury Statute
Correct. Usury Statute is a law establishing a maximum rate of permissible interest for which a lender and borrower of money may contract. (Violations of Statutes)
Jo sells her highly successful, award-winning television production company, JoTV, to Myra. The sales contract says that Jo agrees to never again create a television production company or to produce television programming. Which of the following best describes this contract clause?
Voidable as an unreasonable restraint of trade.
Correct. The promise of the seller of a business not to compete in that particular business is not enforceable by the buyer unless the promise is a reasonable restriction in regard to the period of time and geographic area. The time period in the example is unreasonable, and no geographic area is specifically mentioned. (Violations of Public Policy)
What is a contract or an agreement that eliminates or tends to eliminate competition or otherwise obstructs trade or commerce called?
Restraint of trade
Correct. A restraint of trade is any contract or agreement that eliminates or tends to eliminate competition or otherwise obstructs trade or commerce. (Violations of Public Policy)
Which of the following is true with regard to exculpatory clauses?
An exculpatory clause excuses one party from liability for its own tortious conduct.
Correct. This is a true statement that gives the basic definition of an exculpatory clause. (Violations of Public Policy)
The doctrine of ________ has been justified on the basis that it permits the courts to resolve issues of unfairness explicitly as regards that unfairness without recourse to formalistic rules or legal fictions.
unconscionability
Correct. The doctrine of unconscionability has been justified on the basis that it permits the courts to resolve issues of unfairness explicitly as regards that unfairness without recourse to formalistic rules or legal fictions. (Violations of Public Policy)
Which of the following is not an exception to the general rule that illegal contracts are unenforceable?
A party to an illegal agreement may, prior to performance, withdraw from the transaction and recover whatever he had contributed, no matter what the party had done up to the point of withdrawal.
Correct. This is not an exception to the general rule. A party to an illegal agreement may, prior to performance, withdraw from the transaction and recover whatever he had contributed if the party has not engaged in serious misconduct. (Effect of Illegality)
Which of the following best describes excusable ignorance?
An agreement that appears on its face to be entirely permissible, may, nevertheless, be illegal by reason of facts and circumstances of which one of the parties is completely unaware.
Correct. This is the correct answer. An agreement that appears on its face to be entirely permissible, may, nevertheless, be illegal by reason of facts and circumstances of which one of the parties is completely unaware. (Effect of Illegality)
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