Chapter 13

Question 1

Is a gambling debt an enforceable contract? If so, under what circumstances?

Answer 1

If gambling is illegal then debts incurred from gambling are illegal… right?
A gambling contract is illegal unless it is specifically authorized by state statute.

Question 2

When is life insurance NOT gambling?

Answer 2

• They are betting that you will live longer, you are betting that you are going to die.
• Enforceable because beneficiary has assurable interest in
• Life insurance becomes gambling when you lack assurable interest

Question 3

What is usury?

Answer 3

• old term, bias against interest in biblical times
• we don’t like people that abuse that job
• usury= charging way more interest than is required by law, check cashing places
• ** two ways to approach in court
  1) say no way and charge the state minimum
  2) say no way and not charge any interest

Question 4

Under what two circumstances is a non- compete agreement NOT a restraint of trade and thus not a violation of public policy?

Answer 4

• – two limitations= time and location ( duration and territory)
  1) you can’t make agreement oreverrrrrr
  2) you can’t take over the wholeeeee country, that’s craycray

Question 5

What is an exculpatory clause? when are they enforceable?

Answer 5

• Exculpatory= blame worthy, people try to protect themselves from being responsible, parking lot or parking garage- “not responsible for stolen property or damages” cedar point—“not responsible for injury”
• Unenforceable if they try to weigh negligent torts, someone purposefully not buckling your seat belt or maintenance forgetting to \put a sign up

Question 6

What does “unconscionable” mean in the context of contract law?

Answer 6

• We cannot accept something as acceptable behavior, an escape clause for the courts—gives the courts a way out when a clause is greedy
• Whatever the court says it is

Question 7

What two factors will support a finding of unconscionability by a court?

Answer 7

1) surprise—one side knows something that the other doesn’t know and withholds the information on purpose
2) vastly superior bargaining power
- – if there is ambiguity in the contract it is skewed against the drafter

Question 8

What is a contract of adhesion? How does a finding by a court that a contract is one of adhesion affect its enforceability?

Answer 8

• a contract of adhesion (not unenforceable)= you either take it or leave it.. me bargaining with consumers about utility bill—WMU VS consumers—a little more even. The courts are able to find any provision of a contract unenforceable when dealing with a contract of adhesion