Q&A Hero

Q: Shady lawyer. Brice had a number of ethical issues come up in law school involving alleged cheating but managed to graduate because nothing was ever proven. Upon obtaining his law license, Brice enjoyed living "on the edge" and engaged in tactics that were at least questionable. One of his clients was an older gentleman, Sam, with significant assets and significant legal issues involving a messy divorce stemming from his involvement with a local dog groomer, Susie. Brice told Sam that he felt certain that he could arrange matters so that Sam could live happily in the Caribbean with Susie but that, in addition to paying a hefty legal fee, Sam would need to name Brice as a significant beneficiary in his will and give Brice power of attorney over his assets. Sam agreed to do so and gave Brice power of attorney, and changed his will to reflect that upon his death, Brice would receive half his estate. The other half went to Susie. Sam also paid the hefty fee Brice demanded. At that point Brice agreed to proceed with negotiations in the divorce. Shortly after the divorce, Sam had an unexpected heart attack and died immediately. Susie, the executor of the will, told Brice that she was reporting him to the state bar association and that he was not entitled to any sums from the estate. Brice told Susie that he knew that Susie had failed to pay income tax for all her dog grooming and that he was reporting her unless she kept her mouth shut and consented to the terms of the contract. Brice also said that in return for keeping his mouth shut, he wanted additional sums purportedly for his work on Sam's divorce. Which of the following is true regarding Brice's threat to report Susie for tax evasion? A. Brice is guilty of duress. B. Brice is guilty of undue influence. C. Brice is guilty of duress and undue influence. D. Brice is guilty of intentional wrongful disclosure. E. Brice is not guilty of anything so long as Susie truly cheated on her taxes.

Q: Shady lawyer. Brice had a number of ethical issues come up in law school involving alleged cheating but managed to graduate because nothing was ever proven. Upon obtaining his law license, Brice enjoyed living "on the edge" and engaged in tactics that were at least questionable. One of his clients was an older gentleman, Sam, with significant assets and significant legal issues involving a messy divorce stemming from his involvement with a local dog groomer, Susie. Brice told Sam that he felt certain that he could arrange matters so that Sam could live happily in the Caribbean with Susie but that, in addition to paying a hefty legal fee, Sam would need to name Brice as a significant beneficiary in his will and give Brice power of attorney over his assets. Sam agreed to do so and gave Brice power of attorney, and changed his will to reflect that upon his death, Brice would receive half his estate. The other half went to Susie. Sam also paid the hefty fee Brice demanded. At that point Brice agreed to proceed with negotiations in the divorce. Shortly after the divorce, Sam had an unexpected heart attack and died immediately. Susie, the executor of the will, told Brice that she was reporting him to the state bar association and that he was not entitled to any sums from the estate. Brice told Susie that he knew that Susie had failed to pay income tax for all her dog grooming and that he was reporting her unless she kept her mouth shut and consented to the terms of the contract. Brice also said that in return for keeping his mouth shut, he wanted additional sums purportedly for his work on Sam's divorce. Assuming that Sam had paid all amounts validly due from the divorce proceeding, which of the following is true regarding Brice's attempt to obtain additional fees? A. Brice is guilty of duress. B. Brice is guilty of undue influence. C. Brice is guilty of duress and undue influence. D. Brice is guilty of intentional wrongful disclosure. E. Brice is not guilty of anything so long as he uses no physical force to obtain Susie's agreement.

Q: What is the result of a contract being rescinded?

Q: Scheming Friends. Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. Weaver reluctantly agrees to rent the apartment to Willy for that amount. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test-drives it. Willy is impressed by the low mileage and agrees to buy the car. Finally, Weaver offers to sell Willy a ring for Willy's fiance. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver's informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. Which of the following is true regarding Willy's rights in regards to the ring purchase? A. He will not be able to rescind the contract because Weaver did not make an express false statement regarding the ring. B. He will not be able to rescind the contract because Weaver did not make an express false statement regarding the ring and also because Weaver did not know the ring was a fake when the initial agreement was made. C. He will not be able to rescind the contract unless he can prove that Weaver was at least negligent in not realizing the ring was a fake when the initial agreement was made. D. He will be able to rescind the agreement because Weaver was guilty of duress. E. He will be able to rescind the agreement because Weaver was guilty of fraudulent misrepresentation.

Q: Scheming Friends. Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. Weaver reluctantly agrees to rent the apartment to Willy for that amount. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test-drives it. Willy is impressed by the low mileage and agrees to buy the car. Finally, Weaver offers to sell Willy a ring for Willy's fiance. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver's informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. Which of the following would be the most likely result if Weaver attempts to rescind the agreement to rent the apartment? A. He will be able to rescind the agreement based upon Willy's threat of extortion. B. He will be able to rescind the agreement based upon the threat to Willy's economic interests. C. He will be able to rescind the contract because of a misrepresentation. D. He will not be able to rescind the contract because he agreed to it. E. He will not be able to rescind the agreement unless he can show that he was not actually convicted of the crime alleged.

Q: Scheming Friends. Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. Weaver reluctantly agrees to rent the apartment to Willy for that amount. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test-drives it. Willy is impressed by the low mileage and agrees to buy the car. Finally, Weaver offers to sell Willy a ring for Willy's fiance. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver's informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. Which of the following is true regarding Willy's rights in regards to the car purchase? A. He will not be able to rescind the contract because Weaver made no affirmative statements. B. He will not be able to rescind the contract unless he can prove that he expressly asked Weaver if the mileage was run backwards on the car and Weaver failed to reveal that it had been altered. C. He will not be able to rescind the contract because the mileage alteration did not affect the engine of the car. D. He will be able to rescind the contract because of duress practiced by Weaver. E. He will be able to rescind the contract because of the fraudulent misrepresentation of Weaver.

Q: Pet Pig Farm. Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck when Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. Which of the following would be the result if Marcy attempts to rescind the contract and recover damages only on the basis of the neighbor's objection to a pig farm? A. Marcy may rescind the contract and recover damages because Lucy made an implied misrepresentation. B. Marcy may rescind the contract but may not recover damages because the situation involved a mutual mistake. C. Marcy may recover damages but may not rescind the contract because Lucy made an implied misrepresentation. D. Marcy may not rescind the contract nor may she recover damages because she, Marcy, made a unilateral mistake. E. Marcy may rescind the contract but may not recover damages because she, Marcy, made a unilateral mistake.

Q: Pet Pig Farm. Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck when Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. Which of the following is the most likely result in the dispute between Marcy and Lucy regarding which used truck was sold assuming that both Marcy and Lucy were each innocently mistaken and did not intend to defraud the other? A. The contract will be rescinded. B. Marcy will be allowed to pick the truck she wants to buy because she is the buyer, and she may also recover damages. C. Lucy will be allowed to pick the truck she wants to sell because she is the seller. D. Marcy will be allowed to pick the truck she wants to buy because she also had a contract on the ancillary farm. E. Marcy will be allowed to pick the truck she wants to buy because she is the buyer, but she may not recover damages.

Q: Scheming Friends. Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. Weaver reluctantly agrees to rent the apartment to Willy for that amount. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test-drives it. Willy is impressed by the low mileage and agrees to buy the car. Finally, Weaver offers to sell Willy a ring for Willy's fiance. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver's informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. Of which of the following is Willy guilty in threatening to tell friends about the arrest unless Weaver rents the apartment? A. Duress B. Unconscionability C. Fraud D. Duress, unconscionability, and fraud E. Duress and unconscionability, but not fraud

Q: A relationship in which one party has an unusual degree of _____ in the other can trigger concern about undue influence in gaining the assent of the more dependent party. A. interest B. investment C. trust D. involvement E. both investment and involvement

Q: Maurice contracted with Suzanne to feed and walk her Corgi mix dog, Baby, for $100 while Suzanne was on vacation for one week. One day before Suzanne was to leave, Maurice came over and said that Baby would be a significant amount of trouble and that he would have to receive $150 in order to walk and feed Baby. Suzanne reluctantly agreed. When she returned from vacation, she handed Maurice $100 and refused to pay more. Maurice threatens to take her to small claims court. What would be the likely result? A. Maurice will lose based on economic duress. B. Maurice will lose based on undue influence. C. Maurice will lose based on fraud. D. Suzanne will lose because she breached the amended contract with Maurice. E. Suzanne will lose because she breached the amended contract with Maurice unless she can establish that the prevailing rate for walking and feeding a dog for one week is no more than $100.

Q: Pet Pig Farm. Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck when Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. Assuming that Lucy innocently made a misrepresentation regarding the spring running through the corner of the farm with no reason to believe that was not correct, considering only the lack of a spring issue, which of the following is true if Marcy does not want to go through with the sale of the farm? A. Marcy may rescind the contract and recover compensatory damages only. B. Marcy may rescind the contract, but she may not recover damages. C. Marcy may sue for damages, but she may not rescind the contract. D. Because Lucy acted with scienter, Marcy may receive reliance damages in addition to compensatory damages, but she may not rescind the contract. E. Because Lucy acted with scienter, Marcy may receive reliance damages in addition to compensatory damages, and she may rescind the contract.

Q: Pet Pig Farm. Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck when Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. Assuming that Lucy fraudulently made a misrepresentation regarding the spring running through the corner of the farm knowing the statement was not correct, considering only the lack of a spring issue, which of the following is true if Marcy does not want to go through with the sale of the farm? A. Marcy may rescind the contract, and she will recover $10,000 in damages that is an amount set by federal law. B. Marcy may rescind the contract, but she may not recover damages. C. Marcy may sue for damages regardless of whether she can establish injury, but she may not rescind the contract. D. Marcy may rescind the contract, and she may also sue for damages if she can establish injury. E. Marcy may rescind the contract and she may also recover damages, but only nominal damages.

Q: Jane operates a home decorations shop selling slightly used goods. She bought a painting from Sally for the shop. Bob came into the shop and asked if the painting was by Bill, a local artist of some repute. Jane, without checking with Sally, says, "I'm sure it is" because she really did think it looked like one of Bill's paintings. Bob bought the painting. A week or so later, he took the painting by Bill's studio. Bill just laughed and said that he never painted anything that horrible. Bob took the painting back to Jane and asked for a refund. Jane refused on the basis that she never gave refunds and that Bob took the risk that the painting was not done by Bill. Should Bob sue in small claims court, who will likely win and why? A. Bob on the basis of negligent misrepresentation. B. Bob on the basis of innocent misrepresentation. C. Bob on the basis of unilateral mistake. D. Jane on the basis that Bob accepted the risk of loss. E. Jane both on the basis that Bob accepted the risk of loss and on the basis that he agreed by verbal contract to purchase the painting.

Q: Bruce runs back the odometer on his car to make it appear as if it had fewer miles. Wally buys the car. When he checks back through past sale reports through his state's title office, Wally discovers that the car had fewer miles when Bruce sold it to him than it had when a previous owner sold it to Bruce. In legal terms, in selling the car knowing that he had tempered with the odometer, Bruce is said to have had _____. A. rogue B. corpulence C. scienter D. wrongness E. inattentiveness

Q: Maurice offered to sell his used computer to Mike for $300, and Mike accepted. Both Maurice and Mike believed that the computer was one year old. When the receipt was found, however, it was discovered that the computer was actually 18 months old. Mike wants out of the agreement based on mutual mistake. Which of the following is Maurice's best position in an attempt to enforce the contract? A. That the mistake did not have a material effect on the agreement. B. That the mistake should be allocated equally between the parties. C. That a mutual mistake was involved. D. That a unilateral mistake was involved. E. None of these because, as a matter of law, Mike can get out of the contract with this type of mistake.

Q: Which of the following occurs when a party threatens to file a frivolous civil lawsuit unless another party gives consent to the terms of a contract? A. Duress B. Undue influence C. Durable fraud D. Criminal influence E. Duress and undue influence, but not durable fraud

Q: Which of the following occurs when a party threatens to file a nonfrivolous civil lawsuit unless another party gives consent to the terms of a contract? A. Duress B. Undue influence C. Durable fraud D. Criminal influence E. None of these

Q: When duress is at issue, the _____ needed for legal consent has been removed by the specifics of the threat. A. free will B. knowledge C. specifics D. consideration E. realization

Q: Which of the following occurs when a party threatens to file a criminal lawsuit unless consent is given to the terms of a contract? A. Duress B. Undue influence C. Durable fraud D. Criminal influence E. Duress and undue influence, but not durable fraud

Q: Which of the following is found when one party was forced into an agreement by the wrongful act of another? A. Duress B. Negligence C. Fraud D. Duress, negligence, and fraud E. Duress and fraud, but not negligence

Q: Which of the following is involved in a situation in which a person refuses to perform according to a contract unless the other person either signs another contract with the one making the threat or pays that person a higher price than was specified in the original agreement? A. Fraudulent duress B. Contractual duress C. Negligent duress D. Economic duress E. Specific duress

Q: Which of the following occurs when one party threatens physical harm or extortion to gain consent to a contract? A. Duress B. Undue influence C. Durable fraud D. Criminal influence E. Duress and undue influence, but not durable fraud

Q: Under what condition or conditions will a court now find nondisclosure as having the same legal effect as an actual false assertion? A. When a relationship of trust exists between the parties to the contract. B. When there is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement. C. When the transaction at issue is the first dealing the parties have undertaken together. D. When a relationship of trust exists between the parties to the contract and when there is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement. E. When a relationship of trust exists between the parties to the contract, when there is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement, and when the contract at issue is the first contract the parties have undertaken together.

Q: Heather innocently misrepresented the status of a puppy as being a full-blooded Pomeranian when actually it was a mixed breed. Brad had contracted to purchase the dog, but the problem was discovered prior to his paying for the dog and picking it up. Nevertheless, Brad was very angry and felt that Heather should have been more careful. He said that he planned to rescind the contract and also sue her for damages to punish her and deter others from behaving similarly. Which of the following is true regarding the remedies available to Brad? A. Because Heather violated the contract to provide a full blooded Pomeranian, Brad is entitled to rescind the contract and also to the damages he seeks. B. Because Heather violated the contract to provide a full blooded Pomeranian, Brad is entitled to rescind the contract, but he is not entitled to the damages he seeks. C. Because Heather is not guilty of any wrongdoing, Brad is entitled to no remedy; and Heather has an additional 30 days in order to honor the contract. D. Because Heather is not guilty of any wrongdoing, Brad is entitled to no remedy; and Heather has an additional 60 days in order to honor the contract. E. Because Heather is not guilty of any wrongdoing, Brad is entitled to no remedy; and Heather has an additional 90 days in order to honor the contract.

Q: Which of the following refers to special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person? A. Fraudulent misrepresentation B. Undue influence C. Pressing dominance D. Pressing persuasion E. Relationship dominance

Q: Which of the following involves the active hiding of the truth about a material fact? A. Concealment B. Nondisclosure C. Negligence D. Concealment, nondisclosure, and negligence E. Concealment and nondisclosure, but not negligence

Q: Which of the following refers to a failure to provide pertinent information about a projected contract? A. Concealment B. Nondisclosure C. Negligence D. Concealment, nondisclosure, and negligence E. Concealment and nondisclosure, but not negligence

Q: Which are elements of fraudulent misrepresentation? A. A false statement and a mutual mistake B. A false statement and intent to deceive C. Intent to deceive and negligent representation of a material fact D. A relationship between the parties and negligent misrepresentation of a material fact E. A relationship between the parties and duress

Q: What is the effect of a negligent misrepresentation? A. There is no effect because there is no such term as "negligent misrepresentation." B. It is treated the same as an innocent misrepresentation. C. It is treated the same as a fraudulent misrepresentation. D. It is treated the same as a material misrepresentation. E. It is treated the same as an implied misrepresentation.

Q: As discussed in the text, which of the following is true in China when fraud is involved? A. Because of the governmental interest in increasing international business, it is very difficult to prove fraud when an international business is involved. B. Because of the governmental interest in increasing international business, few penalties are imposed on international businesses that are guilty of fraud. C. Because of the governmental interest in increasing international business, it is very difficult to prove fraud when an international business is involved; and few penalties are imposed on international businesses that are guilty of fraud. D. Chinese law does not recognize the concept of fraud. E. Fraudulent misrepresentations have resulted in heavy fines and refusals to allow any more agreements with Chinese firms.

Q: A _____ is a false representation of a material fact that is consciously false and intended to mislead the other party. A. negligent misrepresentation B. fraudulent misrepresentation C. scienter misrepresentation D. negligent misrepresentation, fraudulent misrepresentation, and scienter misrepresentation E. negligent or fraudulent misrepresentation, but not a scienter misrepresentation

Q: In Indian Law, duress is referred to as _____. A. coercion B. pardanashin C. forced contractual relation D. undue bias E. undue pressurizing

Q: Which of the following is available to a party who was misled by a false statement contained in an innocent misrepresentation? A. Rescission of the contract only B. Compensatory damages along with rescission of the contract C. Punitive damages in addition to compensatory damages and the right to rescind the contract D. Exemplary damages in addition to compensatory damages and the right to rescind the contract E. Relevant damages only

Q: A when the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it, the statement is considered. A. Innocent misrepresentation B. Material representation C. Immaterial representation D. Negligent misrepresentation E. Scienter

Q: A person who makes a misrepresentation but has no knowledge about the falsity of the statement does not have _____. A. information B. premeditation C. planning D. plotting E. scienter

Q: What was the result in the Raffles v. Wichelhaus case in which there were two ships named Peerless and the parties disagreed over which ship was the subject of the contract? A. The court rescinded the contract. B. The court ruled that the older ship would be identified to the contract. C. The court ruled that the newer ship would be identified to the contract. D. The court ruled that the defendant would be allowed to choose which ship would be identified to the contract. E. The court ruled that the plaintiff would be allowed to choose which ship would be identified to the contract.

Q: A false statement about a fact material to an agreement that the person making the statement believed to be true is considered _____. A. wrongful discharge B. innocent misrepresentation C. false misrepresentation D. misleading misrepresentation E. illegal misrepresentation

Q: In general, a(n) _____ mistake does not generally void a contract. A. unclear B. mutual C. unilateral D. clear E. single

Q: Which of the following is false regarding rescinding a contract in the Philippines? A. If consent is given through mistake, violence, intimidation, undue influence, or fraud, contracts are valid until they are annulled. B. The period in which to annul a contract for mistake, violence, intimidation, undue influence, or fraud is four years. C. In cases of intimidation, violence, or undue influence, the time period for annulling a contract is measured from the time the defect in the assent ceases. D. In cases of mistake or fraud, the time period for annulling a contract is measured from the time of the discovery of the defect. E. The law of the Philippines in regard to rescinding a contract for mistake, violence, intimidation, undue influence, or fraud is typical to that of the U.S.

Q: George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result? A. The ring will be returned to George because of mutual mistake. B. The ring will be returned to George because of unilateral mistake. C. The ring will be returned to George because of equity. D. The ring will remain with Penelope unless George can establish that she was negligent in not recognizing the ring's true value. E. The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring.

Q: Which of the following must a mutual mistake involve in order for a mutual mistake to interfere with legal consent? A. A basic assumption about the subject matter of the contract. B. A material effect on the agreement. C. A basic assumption about the subject matter of the contract and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, but not a material effect on the agreement. D. A basic assumption about the subject matter of the contract, an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, and a material effect on the agreement. E. An admission by one of the parties that a misrepresentation occurred.

Q: An error by one party about a material fact is known as a(n) _____ mistake. A. unclear B. mutual C. unilateral D. clear E. single

Q: An error on the part of both parties to an agreement is a(n) _____ mistake. A. unclear B. mutual C. unilateral D. clear E. single

Q: Distinguishing between unilateral and mutual mistakes is important because the classification bears on which contracts _____. A. are void B. are voidable C. lack consideration D. lack legality E. none of these because mutual mistakes are not recognized in the area of contracts

Q: Set forth in detail the test that most states follow regarding the treatment of the capacity of intoxicated persons to enter into contracts.

Q: Define the offense of usury. Identify two legal exceptions discussed in the text whereby usury statutes will not be applied.

Q: Maurice wishes to purchase a small restaurant named "Tasty Burger" in his community from Todd who tells Maurice that, while he loves the teenagers who have frequented his establishment, he is tired of flipping burgers and wants to spend more time fishing on the lake. Maurice has Todd sign a covenant not to compete prohibiting Todd from opening a restaurant within 25 miles of Tasty Burger for five years. Assuming that the covenant was drafted properly, is it likely to be enforced? Discuss arguments for and against covenants not to compete in the sale of a business.

Q: John and Joan enter a contract whereby John will feed Joan's cat for $100 while Joan is on vacation. Another part of the contract provides that John will mow Joan's whole yard for the summer for $500. Just before Joan leaves for vacation, John discovers that Joan's cat is not a domesticated cat, but a lion rescued from the circus. John tells Joan to forget it, that she misrepresented the nature of the animal, and that she can forget about the contract, including the lawn mowing deal. Joan, being a somewhat reasonable person, feels bad about not telling John the whole truth about the cat; and she is willing to give in on that issue. She does, however, want to enforce the yard mowing agreement. What is her best argument?

Q: Cheap Motorcycle. Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has bought a new motorcycle. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass; and, in the next sentence, Tony says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 with lots of fine print by which he can sue Peter and recover any maintenance costs for the next five years. Seeing that he is at an advantage, Tony also throws into the deal that Peter will mow Tony's one acre yard for $5 all summer long. After Tony tells Peter to either take the contract or leave it, Tony reluctantly signs. Which of the following is true regarding the yard mowing agreement? A. It is enforceable. B. It is not enforceable because it is unconscionable. C. It is not enforceable because a teacher and student are involved. D. It is not enforceable unless it can be proven that Peter is over the age of twenty-five. E. It is not enforceable unless Tony also signs a binding contract to pass Peter even if he makes terrible grades.

Q: Polly decides to go snow skiing at a ski facility owned by Bill. Bill requires that all the skiers sign an agreement containing a release providing that even if the ski facility is guilty of negligence resulting in injury, the skier agrees not to hold the ski facility liable. While on one of the steepest slopes, Polly fell breaking her leg. She complains that she was not adequately warned of conditions on the slope and sues Bill. Polly's position is that the release is not enforceable. What is the release Polly signed called, and what is Bill's best argument?

Q: Discuss the views applied in determining the obligations of a minor to the other contracting party on disaffirmance of a contract, which you support and why.

Q: Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick, whereby, if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. Which of the following is true regarding the enforceability of the clause providing that Treena not hold Janice liable for any bad results? A. Such clauses are enforced so long as no duress was applied. B. Such clauses are never enforced. C. Such clauses are always enforced so long as the complaining party had the capacity to contract. D. Such clauses are enforced unless a person sustains a physical injury, and hair damage would not qualify as a physical injury. E. Such clauses might be enforced if the contract involves private businesses providing nonessential services.

Q: Cheap Motorcycle. Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has bought a new motorcycle. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass; and, in the next sentence, Tony says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 with lots of fine print by which he can sue Peter and recover any maintenance costs for the next five years. Seeing that he is at an advantage, Tony also throws into the deal that Peter will mow Tony's one acre yard for $5 all summer long. After Tony tells Peter to either take the contract or leave it, Tony reluctantly signs. Which of the following is true if Peter seeks to rescind the contractual agreement to sell the motorcycle? A. Peter may rescind the agreement on grounds of fraud. B. Peter may rescind the agreement on grounds of unconscionability. C. Peter may rescind the agreement on grounds of mistake. D. Peter may rescind the agreement on grounds of fraud, unconscionability, and mistake. E. Peter may rescind the agreement on grounds of fraud or unconscionability, but not mistake.

Q: Cheap Motorcycle. Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has bought a new motorcycle. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass; and, in the next sentence, Tony says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 with lots of fine print by which he can sue Peter and recover any maintenance costs for the next five years. Seeing that he is at an advantage, Tony also throws into the deal that Peter will mow Tony's one acre yard for $5 all summer long. After Tony tells Peter to either take the contract or leave it, Tony reluctantly signs. Which of the following is an appropriate term for the contract drawn up by Tony? A. Adhesion B. Valid C. Misapplied D. Misdrafted E. Misdirected

Q: Useless Friend. Charles, who is very gullible, is friend with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles' new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous and that he has no intentions of going through with any of it. Which of the following would be a possible defense to the contract as far as the harsh and lopsided requirements involving chores is concerned? A. Substantive unconscionability B. Unclear drafting C. Procedural unconscionability D. Outrageous wording E. Adhesion conscionability

Q: Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick, whereby, if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. The agreement Rick and Janice entered into is referred to as which of the following? A. A competition agreement B. A prohibited competition agreement C. A covenant not to misappropriate D. A policy agreement E. A covenant not to compete

Q: Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick, whereby, if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. Which of the following is true regarding Janice's claim that no judge in the country would enforce such an agreement? A. She is correct because such agreements are considered in restraint of trade in every state. B. She is incorrect because such agreements are criminally illegal in every state. C. She is incorrect because while no court would approve a geographical restriction, some courts recognize time restrictions as being valid. D. She is incorrect because all courts approve such agreements so long as it can be shown the employee gained a benefit other than pay from the employment. E. She is incorrect because courts across the country vary in regards to the enforceability of such agreements.

Q: Beauty Shop Woes. When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick, whereby, if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer, Treena, who was threatening to sue her because her hair turned green after Janice worked on it. Janice agreed that Treena's hair was damaged. Janice pointed out, however, that she told Treena that odd results could result from a dye attempt, and she required that Treena sign a contract releasing Janice from all liabilities before she did anything with Treena's hair. Treena, however, sued anyway. What type of clause did Janice have Treena sign to the effect that she would not hold Janice liable for any bad results? A. Adhesion B. Exculpatory C. Procedural D. Substantive E. Malfeasance

Q: Useless Friend. Charles, who is very gullible, is friend with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles' new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous and that he has no intentions of going through with any of it. Which of the following is true under the Restatement of Contracts, Section 16, regarding the claim of Charles that he should be able to avoid the contract involving Tessa because he was intoxicated? A. Contracts of an intoxicated person are voidable by the intoxicant if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction. B. Contracts of an intoxicated person are void if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction. C. Contracts of an intoxicated person are enforceable because a person should be bound by his or her actions. D. Contracts of an intoxicated person are void only if it can be proven that the other party was involved in encouraging the abuse of alcohol by the intoxicated person. E. Contracts of an intoxicated person are voidable by the intoxicant only if it can be proven that the other party was involved in encouraging the abuse of alcohol by the intoxicated person.

Q: Useless Friend. Charles, who is very gullible, is friend with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles' new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous and that he has no intentions of going through with any of it. Which of the following is true regarding Charles' claim that he had no obligation to defame Tessa? A. Charles is correct in that he could not be legally obligated to commit defamation. B. Charles is correct only if it can be proven that the defamation would cause Tessa money damages. C. Charles is correct only if it can be proven that the defamation would cause Tessa actual injury. D. Charles is correct only if it can be proven that the defamation is undeserved. E. Charles is correct only if it can be proven that he had a prior relationship with Tessa.

Q: Useless Friend. Charles, who is very gullible, is friend with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles' new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous and that he has no intentions of going through with any of it. Which of the following would be a possible defense to Bobby's contract involving chores based upon the small print on the back of the contract? A. Substantive unconscionability B. Unclear drafting C. Procedural unconscionability D. Outrageous wording E. Adhesion conscionability

Q: Irresponsible Teen. At age 17, in a state in which the age of majority is 18, Sally purchased a prom dress from Formal Stuff. She wore it to the prom and then attempted to return it to the store claiming that she was a minor and that she was entitled to a refund. The dress had clearly been worn and had a purple stain that Sally claimed was from grape juice. Additionally, a few days before she turned 18, Sally purchased a used car from Dings and Dents used cars. She had a deal whereby she paid $100 per month on the car. She drove the car and made payments for fourteen months after she turned 18. Then, she returned the car to Dings and Dents and told them that she wanted all her money back. Dings and Dents claimed the car was a necessity. Sally and her parents claimed that the parents were ready and willing to provide a car to Sally and that she only purchased the car from Dings and Dents because she liked that particular style and color. When purchases of the dress and car were made, the sellers knew that Sally was under the age of 18. Which of the following is true regarding Sally's attempt to return the damaged dress? A. In all states Sally has the right to keep the dress and get a refund. B. In all states Sally must return the dress; but she has a right to a full refund. C. Regardless of what she does with the dress, Sally has no right to a refund in any state. D. In some states Sally would have an obligation of restitution to the store. E. In all states Sally would have an obligation of restitution to the store.

Q: Irresponsible Teen. At age 17, in a state in which the age of majority is 18, Sally purchased a prom dress from Formal Stuff. She wore it to the prom and then attempted to return it to the store claiming that she was a minor and that she was entitled to a refund. The dress had clearly been worn and had a purple stain that Sally claimed was from grape juice. Additionally, a few days before she turned 18, Sally purchased a used car from Dings and Dents used cars. She had a deal whereby she paid $100 per month on the car. She drove the car and made payments for fourteen months after she turned 18. Then, she returned the car to Dings and Dents and told them that she wanted all her money back. Dings and Dents claimed the car was a necessity. Sally and her parents claimed that the parents were ready and willing to provide a car to Sally and that she only purchased the car from Dings and Dents because she liked that particular style and color. When purchases of the dress and car were made, the sellers knew that Sally was under the age of 18. In the dispute between Sally and the owner of Dings and Dents, which of the following is true regarding the defense of Sally and her parents that the car was a necessary? A. The claim will have no effect because the law does not recognize the concept of necessaries when minors are involved. B. Social status is always irrelevant in addressing a claim that an item was a necessary. C. Whether or not parents would buy the item at issue is irrelevant in addressing a claim that an item was a necessary. D. A minor may not disaffirm a contract for a necessary. E. Even if a minor is allowed to disaffirm a contract for a necessary, the minor will still be held liable for the reasonable value of the necessary.

Q: Irresponsible Teen. At age 17, in a state in which the age of majority is 18, Sally purchased a prom dress from Formal Stuff. She wore it to the prom and then attempted to return it to the store claiming that she was a minor and that she was entitled to a refund. The dress had clearly been worn and had a purple stain that Sally claimed was from grape juice. Additionally, a few days before she turned 18, Sally purchased a used car from Dings and Dents used cars. She had a deal whereby she paid $100 per month on the car. She drove the car and made payments for fourteen months after she turned 18. Then, she returned the car to Dings and Dents and told them that she wanted all her money back. Dings and Dents claimed the car was a necessity. Sally and her parents claimed that the parents were ready and willing to provide a car to Sally and that she only purchased the car from Dings and Dents because she liked that particular style and color. When purchases of the dress and car were made, the sellers knew that Sally was under the age of 18. In the dispute between Sally and the owner of Dings and Dents, which of the following is true regarding any claim that Sally affirmed the contract? A. So long as, after reaching the age of majority, Sally did not state orally or in writing that she intended to be bound by the contract, then she did not commit the type of express ratification required for her to be bound. B. Sally may have impliedly ratified the contract by making payments for so long after she turned 18. C. An implied ratification occurs when parents agree to accept the debt entered into by a minor. D. If Sally caused any damage whatsoever to the car, she was said to have impliedly ratified the contract. E. Sally was required to expressly ratify the contract before she could be bound to it so long as no damage was done; but if she did any damage to the car, as a matter of law, she is said to have expressly ratified it.

Q: Which of the following was the result in Eric Lucier and Karen A. Haley v. Angela and James Williams, Cambridge Associates LTD., and Al Vasys, the case in the text involving a home inspection that allegedly failed to reveal a bad roof, in which some defendants moved for partial summary judgment seeking enforcement of a limit of liability clause contained in the contract at issue? A. That the limitation of liability would be upheld. B. That the limitation of liability would be partially upheld. C. That the limitation of liability would be enforced only if it could be established that the plaintiffs actually read the agreement prior to signing. D. That the limitation of liability would not be enforced because it was usurious. E. That based on the circumstances involved, the limitation of liability clause was unconscionable and would not be enforced.

Q: Which of the following are contracts that contain multiple parts that can each be performed separately? A. Independent contracts B. Substantive contracts C. Adhesion contracts D. Justifiable contracts E. Severable contracts

Q: A(n) _____ contract is one requiring complete performance by both parties, even if it appears as if the contract contains multiple parts. A. adhesion B. divisible C. justifiable D. indivisible E. independent

Q: A statement releasing one of the parties to an agreement from all liability, regardless of who is at fault or what the injury suffered is would be referred to as a(n) _____. A. substantive agreement B. adhesion agreement C. in pari delicto agreement D. exculpatory E. res ipsa

Q: A party who claims that he or she could not understand contractual terms because of tiny, hard-to-read print on the back of an agreement and the excessive use of legalese is referring to which of the following? A. Substantive unconscionability B. Adhesion conscionability C. Procedural unconscionability D. Exculpatory clauses E. An in pari delicto agreement

Q: Which of the following involves overly harsh or lopsided substance in an agreement? A. Substantive unconscionability B. Adhesion conscionability C. Procedural unconscionability D. Exculpatory clauses E. An in pari delicto agreement

Q: A(n) _____ contract is a contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis. A. substantively unconscionable B. adhesion C. outrageous D. procedurally unreasonable E. unreasonable

Q: How many states engage in at least some regulation of gambling? A. 50 B. 47 C. 40 D. 35 E. 10

Q: Which of the following is a term for laws that limit the types of business activities in which parties may legally engage on Sundays? A. Sabbath laws only B. Blue laws only C. True laws only D. Sabbath and blue laws, but not true laws E. Sabbath laws, blue laws, and true laws

Q: Bob is hired to do computer sales for an electronics store. He agrees that if he leaves his employment, he will not work for another computer store within 25 miles for a period of two years. That type of agreement is called a(n) _____. A. covenant not to compete B. employment covenant C. working covenant D. termination agreement E. public policy agreement

Q: The term _____ refers to the fact that an agreement is so unfair that it is void of conscience. A. unreasonable B. outrageous C. unconscionable D. unrealistic E. unbelievable

Q: If a licensing statute is intended to protect the public's health, safety, and welfare, an agreement with an unlicensed professional is typically deemed _____. A. executed B. enforceable without a fine C. illegal and unenforceable D. enforceable but with a fine E. usurious

Q: Which of the following occurs when a party gives a loan at an interest rate exceeding the legal maximum? A. No enforceable legal violation B. Interest prohibition C. Principle reduction D. Usury E. Plenary

Q: Which of the following is the maximum interest rate? A. 20%. B. 15%. C. 12%. D. 10%. E. It varies depending on the state involved.

Q: If a legal contract is formed and the subject of the contract then becomes illegal under a new statute, the contract is _____. A. discharged B. enforced C. disregarded D. executed E. executory