Leigh contracts with Klausen, a financial planner who is required by the state to have a license. Klausen does not have a license. Their contract is enforceable if

Leigh contracts with Klausen, a financial planner who is required by the state to have a license. Klausen does not have a license. Their contract is enforceable if

a) leigh does not know that Klausen is required to have a license
b) Klausen does not know that he is required to have a license
c) the purpose of the statute is to protect the public from unlicense practitioners
d) the purpose of the statue is to raise government revenue

Answer: D

Sam leases real property from Regina under an agreement that includes an exculpatory clause. This clause is likely unenforceable

Sam leases real property from Regina under an agreement that includes an exculpatory clause. This clause is likely unenforceable 

a) as a matter of public policy
b) if either party is in a business important to the public interest
c) if the lease involves commercial property
d) none of these choices

Answer: A

Franz signs a covenant not to compete with his employer, Gifts n More corporation. This covenant is enforceable if it

Franz signs a covenant not to compete with his employer, Gifts n More corporation. This covenant is enforceable if it

a) is not ancillary to the sale of business
b) is reasonable in terms of geographic area and time
c) is supported by consideration
d) requires both parties to obtain business licenses

Answer: B

Luke is an unlicensed contractor in a state that requires a license to protect the public from unauthorized contractors. Kirkpatrick hires Luke to build an office building. This contract is

Luke is an unlicensed contractor in a state that requires a license to protect the public from unauthorized contractors. Kirkpatrick hires Luke to build an office building. This contract is

a)enforceable only after Kirkpatrick learns of Lukes status
b) enforceable only before Kirkpatrick learns of Lukes status
c) enforceable only if no problems arise
d) unenforceable

Answer: D

Jaime sells his business to Isabella and, as a part of the agreement, promises not to engage in a business of the same kind within thirty miles for one year. This promise is

Jaime sells his business to Isabella and, as a part of the agreement, promises not to engage in a business of the same kind within thirty miles for one year. This promise is

a) an unreasonable restraint of trade
b) unreasonable in terms of geographic area and time
c) unreasonable in terms of Isabellas "goodwill" and "reputation"
d) valid and enforceable

Answer: D

Bosley bets Finster on the outcome of the SuperBowl. Gab=mbling on sports events is illegal in their state. Before the game is over, Bosley's attempt to withdraw from the bet is

Bosley bets Finster on the outcome of the SuperBowl. Gab=mbling on sports events is illegal in their state. Before the game is over, Bosley's attempt to withdraw from the bet is

a) invalid if it comes in the second half
b) invalid unless bosleys team was ahead at the time of the withdrawal
c) invalid without Finsters consent
d) valid

Answer: D

Ewa, a sixteen year old minor, buys a car from Downtown Autos and wrecks it. To disaffirm the contract and satisfy a duty of restitution, Ewa must

Ewa, a sixteen year old minor, buys a car from Downtown Autos and wrecks it. To disaffirm the contract and satisfy a duty of restitution, Ewa must

a) return the car without paying for the damage
b) pay for the damage without returning the car
c) return the car and pay for the damage
d) keep the car and not pay for the damage

Answer: C

Vincenzo is adjudged mentally incompetent. Sophia is appointed to act as Vincenzo's guardian. Vincenzo signs a contract to sell his house. The contract is

Vincenzo is adjudged mentally incompetent. Sophia is appointed to act as Vincenzo's guardian. Vincenzo signs a contract to sell his house. The contract is

a) enforceable if Vincenzo comprhended the consquences
b) enforceale if Vincenzo knew he was entering into a contract
c) enforceable if the house was entirely paid for
d) void

Answer: D

While intoxicated, Konrad agrees to sell his warehouse for half its assessed value. The contract is

While intoxicated, Konrad agrees to sell his warehouse for half its assessed value. The contract is

a)enforceable even if Konrad did not understand its legal consequences
b) enforceable only if Konrad understood its legal consequences
c) unenforceable because it obviously favors the buyer
d) uneforceable under any circumstances

Answer: B

Tom is a minor who enters into a contract with Dinane. All of the following are effective methods for Tom to ratify the contract EXCEPT

Tom is a minor who enters into a contract with Dinane. All of the following are effective methods for Tom to ratify the contract EXCEPT

a) expressly ratifying the contract after Tom reaches the age of majority
b) failing to disaffirm the contract within a reasonable time after Tom reaches the age of majority
c) ratifying the contract before Tom reaches the age of majority
d)impliedly ratifying the contract after Tom reaches the age of majority

Answer: C

TripleA and XXX companies are both major international conglomerates. They are negotiating a contract whereby TripleA will install a computer system for XXX. One clause in the contract states that TripleA will not be liable for damages caused by the negligent installation of the computer system, except that TripleA warrants the system and will fix any problem for a period of two years following installation. TripleA completes the installation of the computer system. XXX loads extensive amounts of information on the system, but all of it is destroyed because TripleA negligently installed the memory chips. TripleA fixes the memory, but XXX incurred significant expenses in recreating the lost information. XXX sues for these expenses. TripleA defends with the noted clause in the contract. Which of the following is correct?

TripleA and XXX companies are both major international conglomerates. They are negotiating a contract whereby TripleA will install a computer system for XXX. One clause in the contract states that TripleA will not be liable for damages caused by the negligent installation of the computer system, except that TripleA warrants the system and will fix any problem for a period of two years following installation. TripleA completes the installation of the computer system. XXX loads extensive amounts of information on the system, but all of it is destroyed because TripleA negligently installed the memory chips. TripleA fixes the memory, but XXX incurred significant expenses in recreating the lost information. XXX sues for these expenses. TripleA defends with the noted clause in the contract. Which of the following is correct?

a. XXX wins; exculpatory clauses are sometimes valid, but this one would not be valid.
b. TripleA wins; this exculpatory clause is enforceable.
c. XXX wins; this exculpatory clause is not valid because it is unconscionable.
d. XXX wins; these types of clauses are never enforceable.

Answer: B

The Pub's secret recipe for its pizza sauce would be considered:

The Pub's secret recipe for its pizza sauce would be considered:

a. a trade secret, and an employment non compete clause would NOT be enforceable to protect it.
b. an exculpatory clause and not enforceable.
c. just a secret recipe and not something the Pub could protect in a noncompete clause.
d. a trade secret, and an employment non compete clause would be enforceable to protect it.

Answer: D

If a contract is made with a person required by law to hold a license, and the purpose of the license is protection of the public, the contract made by an unlicensed person will generally be:

If a contract is made with a person required by law to hold a license, and the purpose of the license is protection of the public, the contract made by an unlicensed person will generally be:

a. enforceable.
b. binding.
c. illegal.
d. unenforceable.

Answer: D

In bailment cases, exculpatory clauses:

In bailment cases, exculpatory clauses:

a. are somewhat more likely to be enforced than in other types of cases.
b. None of these answers.
c. ordinarily involve an attempt to limit liability for damage to persons rather than property.
d. are never used.

Answer: A

An exculpatory clause is generally unenforceable when it attempts to exclude:

An exculpatory clause is generally unenforceable when it attempts to exclude:

a. gross negligence
b. None of these answers.
c. Both of these answers.
d. an intentional tort.

Answer: C

Gerard parked his car at a garage that has a large sign at the entrance saying, "This garage is not liable for items stolen from a car." This type of notice is referred to as:

Gerard parked his car at a garage that has a large sign at the entrance saying, "This garage is not liable for items stolen from a car." This type of notice is referred to as:

a. an exculpatory clause.
b. an unconscionable contract.
c. bailment.
d. a tort.

Answer: A

To be valid, an agreement not to compete must be:

To be valid, an agreement not to compete must be:

a. unessential to the employer.
b. ancillary to a legitimate bargain.
c. the sole subject of the contract.
d. usurious.

Answer: B

Elana is a CPA with an excellent reputation and client base. She sells her tax preparation business to Cory, and the sales contract includes a noncompete clause restricting Elana from opening a similar business for two years within a 10-mile radius of her former office. If she opens a tax preparation office five miles away after one year, a court would probably:

Elana is a CPA with an excellent reputation and client base. She sells her tax preparation business to Cory, and the sales contract includes a noncompete clause restricting Elana from opening a similar business for two years within a 10-mile radius of her former office. If she opens a tax preparation office five miles away after one year, a court would probably:

a. order confiscation of all of her new client files and turn them over to Cory.
b. refuse to enforce the noncompete clause, as it is unreasonable regarding time and geographic area.
c. refuse to become involved, as the noncompete clause was illegal.
d. grant an injunction barring her from operating the new office.

Answer: D

An exculpatory clause is generally unenforceable when:

An exculpatory clause is generally unenforceable when:

a. it involves public transportation.
b. the affected activity is a recreational activity.
c. it is written clearly and in explicit language.
d. it is designed to release a party from liability for ordinarily negligent behavior.

Answer: A

Heintz Corp. hired Nathan to bribe a foreign government official. Heintz gave Nathan $10,000 in cash to make the bribe payment and $2000 for Nathan's efforts. Instead of paying the bribe, Nathan pocketed all of the money. If Heintz sues Nathan, Heintz will:

Heintz Corp. hired Nathan to bribe a foreign government official. Heintz gave Nathan $10,000 in cash to make the bribe payment and $2000 for Nathan's efforts. Instead of paying the bribe, Nathan pocketed all of the money. If Heintz sues Nathan, Heintz will:

a. be able to recover the $10,000, but not the $2,000.
b. not be able to recover the $12,000.
c. be able to recover the $2,000 but not the $10,000.
d. be able to recover the $12,000.

Answer: B