Ch10 Illegal Agreements Flashcards Preview

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Flashcards in Ch10 Illegal Agreements Deck (71):
0

A contract must be for a lawful purpose;

otherwise it is void.

1

It may consist of a private wrong, such as a tort.

A contract that is void does not necessarily involve a crime.

2

Contracts contrary to a public policy is void.

A contract that is void does not necessarily involve a crime.

3

Gambling Contracts

Contracts prohibited by Statute

4

Sunday contracts

Contracts prohibited by Statute

5

Usurious Contract

Contracts prohibited by Statute

5

Contracts of an unlicensed operator.

Contracts prohibited by Statute

6

Contracts for the sale of prohibited articles.

Contracts prohibited by Statute

7

Contracts in unreasonable restraint of trade.

Contracts prohibited by Statute

8

Administrative Agency Orders.

Contracts prohibited by Statute

9

Contracts Not to Compete.

Contracts in unreasonable restraint of trade

10

Contracts to Limit Competition

Contracts in unreasonable restraint of trade

11

Contracts to Fix the Resale Price.

Contracts in unreasonable restraint of trade

12

Unfair Competitive Practices.

Contracts in unreasonable restraint of trade

13

Contracts limiting freedom of marriage.

Contracts contrary to Public Policy

14

Contracts obstructing the administration of justice.

Contracts contrary to Public Policy

16

Contracts injuring the public service.

Contracts contrary to Public Policy

17

An agreement in which parties win or lose by chance.

Gambling Contract

18

Interest applied when no rate specified.

Legal rate

19

Highest legal rate of interest

Maximum Contract Rate

20

Charging higher rate of interest than law allows

Usury

21


1. Some contracts can be for unlawful purposes, depending upon who negotiates them.

False

22


2. A contract that is set aside because of illegality always involves the commission of a crime.


False

23


3. If a contract contains both distinctively legal and illegal parts, a court can set aside the illegal part and enforce the legal part.

True

24


4. Under common law, private wagering contracts were unenforceable. However, now under the UCC, most private wagering contracts are enforceable.

False

25


5. Sunday contract laws are consistent within all 50 states.

False

26


6. All contracts to obstruct justice are void.

True

27


7. The legal rate is considerably higher than the contract rate.

False

28


8. All contracts that may from their nature injure public service are void.

True

29


9. Discriminating in price between competing buyers when the goods are of like grade, quantity, and quality is considered unfair competitive practice.

True

30

10. The highest rate of interest that may be charged is called the ________ rate.

b. maximum contract

31

11. State laws that limit the rate of interest that may be charged for the use of money are called ________ laws.

d. usury

32

12. A contract not to compete:

c. can be valid when buying a business or making an employment contract.






33


13. Contracts to generally restrain trade are in violation of the:

b. Sherman Antitrust Act.

34


14. A contract that is contrary to public policy would be:

a. a contract to limit the freedom of marriage.

35

Interest rate applied when no rate is specified. (Two words)

Legal Rate

36

State laws that limit the rate of interest that may be charged for the use of the money are called _________ laws.

Usury

37

The ___________ _________ ___________ attempted to eliminate certain unfair competitive practices in interstate commerce.

Robinson Patman Act

38

This agreement between a buyer and seller that the buyer shall not resell below a stated agreement is generally considered illegal.

Price Fixing

39

Contracts _________ to public policy are unenforceable.

Contrary

40

Government policy encourages ____________.

Competition

41

This is the highest rate that may be charged. (Three words)

Maximum Contract Rate

42

This type of contract is one in which a person agrees to pay another for negotiating, procuring, or bringing about a marriage. (Two words)

Marriage Brokerage

43

Many government administrative agencies have the __________ to issue rules and regulations; that have the force of the law.

Authority

44

In this court case the court held that the contract was clearly a contract against public policy and therefore was __________.

Void

45

Normally a contract not to _____________ is illegal; unless there are certain circumstances.

Compete

46

This contract is considered illegal because of the day the contract fell on.

Sunday

47

A transaction wherein the parties stand to win or lose based on pure chance.

Gambling Contract

48

Contracts to use one's ____________ in obtaining a public contract that by statute must be let to the lowest responsible bidder....

Influence

49

There are two types of government intervention that specifically declares it illegal that such contracts that affect interstate commerce and are therefore subject to regulation by the federal government.

Sherman Anti-Trust Act

50

If the act itself is legal, but the manner of committing the act that is called for in the contract is illegal,

The contract is void.

51

A contract contrary to public policy is also

Illegal.

52

If the parties are not equally guilty, courts may assist the less guilty party. However, courts will not allow a wrongdoer to enforce a contract against

An innocent party.

53

If the contract is individual, that is, it cannot be performed except as an entity, then the illegality of one part renders the whole contract

Invalid.

54

In general, the courts will leave the parties to a private_______ ________ where it finds them and will not allow one party to recover damages from the other for the breach of gambling debt.

Gambling Contract

55

No state will permit the stakeholder, who is considered merely a ______ ___ ______, to keep the money.

Trustee of funds

56

Trading on the _____ ______ or the grain market represents legitimate business transactions.

Stock exchange

57

The violators of Sunday acts are seldom

Prosecuted.

58

If merchandise is sold on thirty days' credit, the seller may collect interest from the time the thirty days expire until

The debt is paid.

59

The courts will treat transactions as ______ when there is in fact a lending of money at a usurious rate even though disguised.

Usurious

60

The penalty for usury varies from _______ ___ ______.

State to state.

61

In all states, special statutes govern consumer loans by...

Pawnbrokers, small loan companies, and finance companies.

62

Loans of very large amounts of money or business loans are frequently not covered by

Usury laws.

63

Statutes make it illegal to operate certain types of businesses or professions without

A license.

64

The most common types of professional people who must be licensed to operate include...

Doctors, lawyers, certified and licensed public accountants, dentists, and insurance and real estate salespeople.

65

A licensing law may be designed solely as a revenue measure by requiring payment of a fee for

A license.

66

Contracts made by an unlicensed person operating in one of the fields or businesses covered by such a law are normally held

Valid.

67

The unlicensed operator may still be subject to fine or ________ for violating the law.

Imprisonment

68

In the absence of a contract prohibiting the seller from attempting to retake the _______, the seller may engage in the same business again and seek to retain former customers.

Goodwill

69

It is customary and highly desirable when purchasing a business to include in the contract a _____ prohibiting the seller from entering the same business again in the trade territory for specified length of time.

Provision

70

The restriction as to territory should not go beyond the _____ ____ of the business.

Trade area