Ch10 Illegal Agreements Flashcards
It may consist of a private wrong, such as a tort.
A contract that is void does not necessarily involve a crime.
A contract must be for a lawful purpose;
otherwise it is void.
Contracts contrary to a public policy is void.
A contract that is void does not necessarily involve a crime.
Gambling Contracts
Contracts prohibited by Statute
Sunday contracts
Contracts prohibited by Statute
Usurious Contract
Contracts prohibited by Statute
Contracts of an unlicensed operator.
Contracts prohibited by Statute
Contracts for the sale of prohibited articles.
Contracts prohibited by Statute
Contracts in unreasonable restraint of trade.
Contracts prohibited by Statute
Administrative Agency Orders.
Contracts prohibited by Statute
Contracts Not to Compete.
Contracts in unreasonable restraint of trade
Contracts to Limit Competition
Contracts in unreasonable restraint of trade
Contracts to Fix the Resale Price.
Contracts in unreasonable restraint of trade
Unfair Competitive Practices.
Contracts in unreasonable restraint of trade
Contracts limiting freedom of marriage.
Contracts contrary to Public Policy
Contracts obstructing the administration of justice.
Contracts contrary to Public Policy
Contracts injuring the public service.
Contracts contrary to Public Policy
An agreement in which parties win or lose by chance.
Gambling Contract
Interest applied when no rate specified.
Legal rate
Highest legal rate of interest
Maximum Contract Rate
Charging higher rate of interest than law allows
Usury
- Some contracts can be for unlawful purposes, depending upon who negotiates them.
False
- A contract that is set aside because of illegality always involves the commission of a crime.
False
- If a contract contains both distinctively legal and illegal parts, a court can set aside the illegal part and enforce the legal part.
True
- Under common law, private wagering contracts were unenforceable. However, now under the UCC, most private wagering contracts are enforceable.
False
- Sunday contract laws are consistent within all 50 states.
False
- All contracts to obstruct justice are void.
True
- The legal rate is considerably higher than the contract rate.
False
- All contracts that may from their nature injure public service are void.
True
- Discriminating in price between competing buyers when the goods are of like grade, quantity, and quality is considered unfair competitive practice.
True
- The highest rate of interest that may be charged is called the ________ rate.
b. maximum contract
- State laws that limit the rate of interest that may be charged for the use of money are called ________ laws.
d. usury
- A contract not to compete:
c. can be valid when buying a business or making an employment contract.
- Contracts to generally restrain trade are in violation of the:
b. Sherman Antitrust Act.
- A contract that is contrary to public policy would be:
a. a contract to limit the freedom of marriage.
Interest rate applied when no rate is specified. (Two words)
Legal Rate
State laws that limit the rate of interest that may be charged for the use of the money are called _________ laws.
Usury
The ___________ _________ ___________ attempted to eliminate certain unfair competitive practices in interstate commerce.
Robinson Patman Act
This agreement between a buyer and seller that the buyer shall not resell below a stated agreement is generally considered illegal.
Price Fixing
Contracts _________ to public policy are unenforceable.
Contrary
Government policy encourages ____________.
Competition
This is the highest rate that may be charged. (Three words)
Maximum Contract Rate
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
Many government administrative agencies have the __________ to issue rules and regulations; that have the force of the law.
Authority
In this court case the court held that the contract was clearly a contract against public policy and therefore was __________.
Void
Normally a contract not to _____________ is illegal; unless there are certain circumstances.
Compete
This contract is considered illegal because of the day the contract fell on.
Sunday
A transaction wherein the parties stand to win or lose based on pure chance.
Gambling Contract
Contracts to use one’s ____________ in obtaining a public contract that by statute must be let to the lowest responsible bidder….
Influence
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
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.
A contract contrary to public policy is also
Illegal.
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.
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.
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
No state will permit the stakeholder, who is considered merely a ______ ___ ______, to keep the money.
Trustee of funds
Trading on the _____ ______ or the grain market represents legitimate business transactions.
Stock exchange
The violators of Sunday acts are seldom
Prosecuted.
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.
The courts will treat transactions as ______ when there is in fact a lending of money at a usurious rate even though disguised.
Usurious
The penalty for usury varies from _______ ___ ______.
State to state.
In all states, special statutes govern consumer loans by…
Pawnbrokers, small loan companies, and finance companies.
Loans of very large amounts of money or business loans are frequently not covered by
Usury laws.
Statutes make it illegal to operate certain types of businesses or professions without
A license.
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.
A licensing law may be designed solely as a revenue measure by requiring payment of a fee for
A license.
Contracts made by an unlicensed person operating in one of the fields or businesses covered by such a law are normally held
Valid.
The unlicensed operator may still be subject to fine or ________ for violating the law.
Imprisonment
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
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
The restriction as to territory should not go beyond the _____ ____ of the business.
Trade area
