Question 1

Which of the following constrains the employee from divulging or using certain information gained during his employment?

Accepted Answer

A)   nonsolicitation agreement
B)   nondisclosure agreement
C)   noncompetition clause
D)   deed of trustE) All of the above
F) None of the above

Question 2

To determine _____ unconscionability, courts will scrutinize the contract terms themselves to determine whether they are oppressive, unreasonably one-sided, or unjustifiably harsh.

Accepted Answer

A)   procedural
B)   voidable
C)   substantive
D)   associativeE) None of the above
F) C) and D) C

Question 3

Which of the following statements is true regarding noncompetition clauses in the employment contracts?

Accepted Answer

A)   These clauses are illegal.
B)   Employments contracts with these clauses are voidable.
C)   These clauses put postemployment restrictions on the employees.
D)   These clause need to be ratified by the employer.E) B) and D)
F) All of the above

Question 4

An agreement to divorce one's spouse is considered to be illegal.

Accepted Answer

A) True 
 B)False

Question 5

Jan opens a sandwich shop across the street from another sandwich shop run by Amy. Amy is disturbed by this competition, and she agrees to pay Jan $5000, in exchange for Jan's promise to quit the business and not to engage in a similar business within ten-mile radius of Amy's business. Is this contract legal and enforceable? Why or why not? If the agreement is not enforceable, how might Jan and Amy restructure it to increase its chances of being legal?

Accepted Answer

The agreement is illegal because it rest...

Question 6

In technical legal terms, a party not equally in the wrong is said to be not in _____.

Accepted Answer

A)   res ipsa loquitur
B)   ab initio
C)   pari delicto
D)   ad idemE) All of the above
F) A) and C)

Question 7

A noncompetition clause is also known as a "liability waiver."

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an example of substantive unconscionability?

Accepted Answer

A)   Terms that are stated in "fine print"
B)   A disparity in bargaining power between the parties
C)   High-pressure sales tactics
D)   Unjustifiably harsh termsE) A) and D)
F) C) and D)

Question 9

_____ is generally taken to mean the absence of meaningful choice together with terms unreasonably advantageous to one of the parties.

Accepted Answer

A)   Unconscionability
B)   Illegality
C)   Adhesion
D)   RescissionE) A) and D)
F) B) and D)

Question 10

Toby, an Ohio real estate broker, misrepresented to Allen that Toby was licensed in Michigan under Michigan's statute regulating real estate brokers. Allen signed a standard form listing contract agreeing to pay Toby a 6% commission for selling Allen's home in Michigan. Toby sold Allen's home. Under the circumstances, Allen is:

Accepted Answer

A)   not liable to Toby for any amount because of the rule of mirror image which needs to be fulfilled for creating a binding contract.
B)   not liable to Toby for any amount because Toby violated the Michigan licensing requirements.
C)   liable to Toby only for the value of services rendered under the quasi-contract theory.
D)   liable to Toby for the full commission under the promissory estoppel theory.E) B) and D)
F) B) and C) B

Question 11

An agreement that violates legislative and court-made rules and creates threat to public policy shall be denied enforcement on the ground of illegality.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a possible example of procedural unconscionability?

Accepted Answer

A)   A clause excluding a seller's liability for consequential damages from a defective good
B)   A clause imposing a penalty for failure to deliver the goods on time
C)   A high price term in a contract
D)   A fine-print price term in a contractE) C) and D)
F) A) and B)

Question 13

Amy is hired by BigMart as a cashier. At the time of hiring, Amy is required to sign an arbitration agreement under which she agreed to settle any and all claims she might have relating to her employment by final and binding arbitration before a neutral arbitrator and in accordance with BigMart's "Dispute Resolution Rules and Procedures" which is a separate ten-page document containing complex procedural details. Under the agreement, Amy is required to pay for all arbitration-related costs, and BigMart can still sue Amy in civil court for claims arising from her employment. A court will most likely view this agreement as:

Accepted Answer

A)   unenforceable since it is a quasi-contract.
B)   enforceable because it is an arbitration agreement.
C)   unconscionable because it is an adhesion contract that is oppressive.
D)   enforceable because it is part of a valid employment agreement.E) A) and B)
F) A) and C)

Question 14

Which of the following is NOT a requirement in the enforceability of a noncompetition clause?

Accepted Answer

A)   The noncompetition clause must serve a legitimate business purpose.
B)   The noncompetition clause must be regarding the sale of goods.
C)   The restriction on competition must be reasonable in time, geographic area, and scope.
D)   The noncompetition clause should not impose an undue hardship.E) A) and D)
F) C) and D)

Question 15

In which of the following situations, a court is most likely to refuse to enforce a noncompetition clause?

Accepted Answer

A)   The clause is not ratified by the employer.
B)   The employment contract which contains the clause is an implied-in-fact contract.
C)   The clause restricts employees from engaging in a "common calling."
D)   The employment contract which contains the clause is a quasi-contract.E) All of the above
F) None of the above

Question 16

Describe the three criteria that need to be fulfilled to enforcing a noncompetition clause.

Accepted Answer

The three criteria that need to be fulfilled to enforcing a noncompetition clause are:
1. Clause must serve a legitimate business purpose: This means that the person protected by the clause must have some justifiable interest-such as an interest in protecting goodwill or trade secrets-that is to be protected by the noncompetition clause.
2. The restriction on competition must be reasonable in time, geographic area, and scope: Another way of stating this is that the restrictions must not be any greater than necessary to protect a legitimate interest.
3. The noncompetition clause should not impose an undue hardship: A court will not enforce a noncompetition clause if its restraints are unduly burdensome either on the public or on the party whose ability to compete would be restrained.

Question 17

A(n)  _____ clause is a provision in a contract that purports to relieve one of the parties from tort liability.

Accepted Answer

A)   exculpatory
B)   implied-in-fact
C)   quasi
D)   expressedE) None of the above
F) A) and B)

Question 18

A contract to commit a serious crime is a legal contract.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is most true regarding noncompetition clauses in contracts?

Accepted Answer

A)   Such clauses are not used during employment contracts.
B)   If they have a legitimate business purpose, such clauses will be enforced.
C)   Such clauses are enforced only for protecting the environment and conserving resources.
D)   Such clauses help in promoting free trade.E) None of the above
F) A) and B)

Question 20

One example of procedural unconscionability is the use of "fine print" in stating a contractual provision.

Accepted Answer

A) True 
 B)False

Exam 15: Illegality

Which of the following constrains the employee from divulging or using certain information gained during his employment?

Correct Answer
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To determine _____ unconscionability, courts will scrutinize the contract terms themselves to determine whether they are oppressive, unreasonably one-sided, or unjustifiably harsh.

Correct Answer
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C

Which of the following statements is true regarding noncompetition clauses in the employment contracts?

Correct Answer
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An agreement to divorce one's spouse is considered to be illegal.

Correct Answer
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Correct Answer
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The agreement is illegal because it rest...
View Answer

In technical legal terms, a party not equally in the wrong is said to be not in _____.

Correct Answer
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A noncompetition clause is also known as a "liability waiver."

Correct Answer
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Which of the following is an example of substantive unconscionability?

Correct Answer
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_____ is generally taken to mean the absence of meaningful choice together with terms unreasonably advantageous to one of the parties.

Correct Answer
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Correct Answer
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B

An agreement that violates legislative and court-made rules and creates threat to public policy shall be denied enforcement on the ground of illegality.

Correct Answer
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Which of the following is a possible example of procedural unconscionability?

Correct Answer
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Correct Answer
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Which of the following is NOT a requirement in the enforceability of a noncompetition clause?

Correct Answer
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In which of the following situations, a court is most likely to refuse to enforce a noncompetition clause?

Correct Answer
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Describe the three criteria that need to be fulfilled to enforcing a noncompetition clause.

A(n) _____ clause is a provision in a contract that purports to relieve one of the parties from tort liability.

Correct Answer
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A contract to commit a serious crime is a legal contract.

Correct Answer
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Which of the following is most true regarding noncompetition clauses in contracts?

Correct Answer
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One example of procedural unconscionability is the use of "fine print" in stating a contractual provision.

Correct Answer
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Exam 15: Illegality

Which of the following constrains the employee from divulging or using certain information gained during his employment?

Correct AnswerverifiedShow Answer

To determine _____ unconscionability, courts will scrutinize the contract terms themselves to determine whether they are oppressive, unreasonably one-sided, or unjustifiably harsh.

Correct AnswerverifiedC

Which of the following statements is true regarding noncompetition clauses in the employment contracts?

Correct AnswerverifiedShow Answer

An agreement to divorce one's spouse is considered to be illegal.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe agreement is illegal because it rest...View AnswerShow Answer

In technical legal terms, a party not equally in the wrong is said to be not in _____.

Correct AnswerverifiedShow Answer

A noncompetition clause is also known as a "liability waiver."

Correct AnswerverifiedShow Answer

Which of the following is an example of substantive unconscionability?

Correct AnswerverifiedShow Answer

_____ is generally taken to mean the absence of meaningful choice together with terms unreasonably advantageous to one of the parties.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

An agreement that violates legislative and court-made rules and creates threat to public policy shall be denied enforcement on the ground of illegality.

Correct AnswerverifiedShow Answer

Which of the following is a possible example of procedural unconscionability?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is NOT a requirement in the enforceability of a noncompetition clause?

Correct AnswerverifiedShow Answer

In which of the following situations, a court is most likely to refuse to enforce a noncompetition clause?

Correct AnswerverifiedShow Answer

Describe the three criteria that need to be fulfilled to enforcing a noncompetition clause.

A(n) _____ clause is a provision in a contract that purports to relieve one of the parties from tort liability.

Correct AnswerverifiedShow Answer

A contract to commit a serious crime is a legal contract.

Correct AnswerverifiedShow Answer

Which of the following is most true regarding noncompetition clauses in contracts?

Correct AnswerverifiedShow Answer

One example of procedural unconscionability is the use of "fine print" in stating a contractual provision.

Correct AnswerverifiedShow Answer

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C

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The agreement is illegal because it rest...
View Answer

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B

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