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Exam 13: Illegal Bargains

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Question 31

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

A) A statute requiring that doctors be licensed.
B) A statute requiring that salespeople be licensed, but not establishing any educational or training requirements.
C) A statute requiring public school teachers to be licensed.
D) A statute that requires insurance agents to pass a test before selling insurance in a state.

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Question 32

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Who usually enters into employment contracts and what provision is commonly included regarding possible restraint of trade? Explain the purpose of such provisions.

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Salespeople, management personnel, and o...

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Question 33

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Where a stipulation in restraint of trade is part of the sale of a business, it may be valid if the restraint is within reasonable limitations to protect the business's goodwill.

The legal effect of a usurious loan varies from state to state.

Rose is working hard on Arlin's mayoral campaign.She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 if she will register and vote for Arlin.Violet does so, but Arlin loses the election, and Rose now refuses to pay.Rose's agreement to pay Violet:

Mel has a neighborhood grocery store that he would like to sell.Casey is interested in purchasing the business, but he is concerned because he knows that Mel has built up a lot of goodwill over the years, and he wonders whether Mel might not just open another store down the block and take all of the business from the old store with him.Casey asks for and receives from Mel a clause in the sale agreement that Mel will not open another grocery store within a 150-mile radius of the old store for a period of at least ten years. a.What is this agreement called? b.Is the negotiated clause a valid one? Explain why or why not. c.What guidelines would a court ordinarily use in determining whether to enforce such a clause?

Under which of the following circumstances would a court be unlikely to enforce the illegal contract?

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

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

Distinguish between procedural and substantive unconscionability.

Oswald applied for a loan from Pointe Lenders.Pointe's reasonable cost of checking Oswald's credit will be considered as part of the financing charge when determining whether Pointe's rate of interest exceeds that allowable under the usury statute.

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

The usual means of enforcing an agreement prohibiting an employee from competing in a described territory for a stated period of time is by injunction.

Where parties to a failed agreement are in pari delicto , a court will provide a remedy to the injured party.

What is the legal effect of an agreement that is criminal, tortious, or otherwise contrary to public policy, and why does it have that effect?

Carl and Ron both work in road construction.They know that several jobs are going to be up for public bids, and agree between themselves that Carl will bid on one job and Ron will bid on the other, so that they both have work for the summer.When the bids are opened, Carl realizes that Ron has bid on both jobs.Ron is awarded both contracts.If Carl now wants to sue Ron for breach of contract:

Delbert won a $500 bet with Samuel on the outcome of the World Series, but Samuel refuses to pay.Discuss what recourse Delbert has.If Delbert had instead bought a ticket from a state-operated lottery, would his recourse be different?

Permissible lender's expenses, which would not be considered in determining the rate of interest under usury statutes, include all but which of the following?

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

The Uniform Commercial Code provides that a court may scrutinize every contract for the sale of goods to determine whether, in its commercial setting, purpose, and effect, the contract is: