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Question 1.1. Of the following statements about exculpatory clauses, which is accurate? (Points : 1)
They cannot relieve a party from liability for battery (which is the intentional injuring of a person)

They always are enforceable if they are clearly and conspicuously stated in the agreement

They may legally relieve an employer from liability for worker’s compensation benefits

They are enforceable when the party benefited by them owes a duty to the public

Question 2.2. A clearly illegal provision in an agreement: (Points : 1)
Infects the whole agreement

Means criminal liability for the party who drafted it

May be divisible from the rest of the agreement, which means that the court will enforce the agreement without it

Can be rescinded if the weaker party voluntarily waives it

Question 3.3. An exculpatory clause, regardless of how specifically drafted and clear in content, will not be enforced if the party seeking exculpation owes a duty to the public and the clause, if enforced, will adversely affect the public interest (Points : 1)
True

False

Question 4.4. We know that courts act with a great deal of caution when considering whether to impose a covenant against competition against an employee who agreed to it. Identify which, if any, of the below circumstances would influence a court to rule in favor of enforcing the covenant against the employee (Points : 1)
The employer entrusted the employee with trade secrets

The employer gave employee access to confidential information

The customers of the employer are ‘near permanent’ in nature

All of the above

Question 5.5. Black and White owned respective businesses in Santa Monica, California. Each sold electronics ranging from cables to high definition televisions. Assume that Black and White entered into a written contract whereby each agreed not to solicit or sell to the others customers. White breached the contract and actually sent out ‘mailers’ soliciting Black’s customers. Black sued White. This contract is illegal. (Points : 1)
True

False

Question 6.6. Identify which, if any, of the below examples includes an insurable risk. (Points : 1)
Jones takes out a homeowner’s policy on the home that he lives in and owns

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Brown takes out insurance coverage against collision on a car that he just purchased

White owns an amusement park and takes out liability insurance to cover any injuries that occur to patrons

All of the above

Question 7.7. Jones purchased Smith’s photography business. In their contract, Smith agreed to not solicit any customers of Jones and to not open a competing business within a 3 mile radius for a period of 18 months. According to the above facts, the anti-competition clause is ancillary to the underlying contract between Smith and Jones. (Points : 1)
True

False

Question 8.8. Alex lived next door to the Browns who owned a home worth well over two million dollars. The neighborhood was vulnerable to fires. Alex took out an insurance policy on the home owned by the Browns. The policy was for two million five hundred thousand dollars. If the home owned by the Browns burned down, Alex would be able to collect on the policy. The contract between Alex and the Insurance Co. was in fact legal! (Points : 1)
True

False

Question 9.9. Which of the following is a possible example of substantive unconscionability? (Points : 1)
Terms that are written in an incomprehensible legalese

A disparity in bargaining power between the parties

A clause relieving a seller of goods from liability for injury caused to a consumer due to the defective nature of the goods sold

A consumer’s inability to read

None of the above

Question 10.10. Dr. Wilson, an orthopedic surgeon worked for the ‘Medical Group’ in Utah. He signed an agreement when hired and agreed to not “compete with the Group after leaving it for a period of 2 years and within a radius of 5 miles.” After leaving the group, and in violation of the covenant against competition, Dr. Wilson set up an orthopedic practice. The Medical Group did not replace Dr. Wilson with another orthopedic surgeon and none was practicing medicine within 35 miles. If the Medical Group sued to enforce the covenant, a court would rule in its favor. (Points : 1)
True

False

Question 11.11. Any contract that contains an illegal clause is totally illegal as a whole. As the courts say, “illegality in a part always infects the whole.” (Points : 1)
True

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False

Question 12.12. Of the following statements about exculpatory clauses, which is accurate? (Points : 1)
They can be used to relieve a party of liability for an intentional tort

They are more likely to be enforced if they are conspicuous than if they are inconspicuous

They may be used to relieve a landlord from liability for her duty to keep the premises in a habitable condition

They are effective only when the party benefited by them owes a duty to the public

Question 13.13. Individuals who engage in a “common calling” are the most likely to have a covenant against competition enforced against them. (Points : 1)
True

False

Question 14.14. A non-competition clause in an employment contract: (Points : 1)
Is judged by easier standards than a non-competition clause between two businesses

Is usually unenforceable if it restricts employees from engaging in a common calling

Is always void on public policy grounds

Is enforceable in any case where it does not restrain competition

None of the above

Question 15.15. State X has statutes on its books that require certain professions to be licensed before members can legally contract with the public. Which of the below categories would you expect to be required to be licensed as a condition of contracting with the public? (Points : 1)
Accountants

Building contractors

Dentists

Architects

All of the above

Question 16.16. Hunters’ Inc. sold an assault rifle to Customer. Customer planned to use the weapon to commit mass murder at the campus where he attended college. Hunters’ Inc. suspected Customer to be emotionally unbalanced but was unaware of his plan to commit mass murder. The contract is illegal! (Points : 1)
True

False

Question 17.17. Mike was hired by Avant-Guarde, a stylish clothing store, to sell clothing . The contract was for one year. At the end of the year, Mike decided to return to school. He had done an excellent job of selling clothes and made friends with several of the customers. The owner of Avant Guard feared the someday Mike might pursue owning his own clothing store. He got Mike to enter into a contract agreeing not to compete against Avant Guard in the future. Mike was paid $2,000.00 as his end of the bargain. The agreement between Avant-Guarde and Mike was not ancillary to a contract of employment. It was illegal. (Points : 1)
True

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False

Question 18.18. Bob, a first in his law student at Harvard University, agreed to prepare a will for his classmate’s mother for $150.00 which was well below the going rate. Bob prepared the will and did a competent job. The mother refused to pay Bob claiming that the contract was illegal because Bob was not licensed to practice law. (Points : 1)
If he sues, Bob will win this case because the contract is legal.

If he sues, Bob will lose this case because the contract is illegal.

The mother knew Bob was a student and she got exactly what she bargained for and is thus obligated to pay

None of the above

Question 19.19. Missy graduated # 1 from her law school and passed the state bar examination on her first try. Missy neglected to pay her annual state bar registration fee. She performed substantial legal work competently for a client who refused to pay her upon learning that Missy had not paid her dues. Assume that a statute existed in the state where this contract was formed that required lawyers to pay their annual dues. The revenue from the dues was used to fund the bar association of said state and failure to pay the dues did not result in a suspension or revocation of an attorney’s license. (Points : 1)
By failing to pay her annual dues, Missy could not collect her fees because her contract with Client was illegal

The statute requiring annual payment of dues was regulatory because its aim was to protect the public

A & B

None of the above

Question 20.20. The courts in this country take a uniform position when a contract contains an illegal covenant against competition. In such a case, the court will rule that the entire contract is illegal and therefore unenforceable. (Points : 1)
True

False