Legality

Question 1

Wagers

Answer 1

Gambling

a gambling contract is illegal unless it is a type of wagering specifically authorized by a state statute

Question 2

Insurance

Answer 2

anyone taking out a policy on the life of another must have an insurance interest in that person

ex: family
- cannont wager on the death of a person

Question 3

Licensing statutes

Answer 3

statutes require licenses for anyone who practices a profession
- licensing requirement is designed to protect the pubic and contracts made by an unlicensed worker is unforceable

Question 4

Usury

Answer 4

prohibit charging excess interest on loans

Question 5

American Express Travel Related Services Company Inc. v. Assih

Answer 5

• American express alleged that New York resident missed a credit card payment
• his interest rate: 12.24 - 21 - 27.99 he eventually stopped paying
• American express sued Assih
• should New York or Utah law apply?
• Assih= new York
• American express= Utah law
• Utah has not substantial relationship to the parties
• New York law will apply

Question 6

Noncompete agreements

Answer 6

a contract in which one party agrees not to compete with another in a stated type of business

Question 7

Ancillary

Answer 7

the noncompetition agreement must be part of a larger agreement

Question 8

sale of business

Answer 8

when a noncompete agreement is ancillary to the sale of business it is enforceable if reasonable in time, geographic area, and scope of activity

Question 9

employment

Answer 9

a noncompete clause in an employment contract is generally enforceable only if it is essential to the employer, fair to the employee and harmless to the general public

Question 10

Exculpatory clause

Answer 10

a contract provision that attempts to release one party from liability in the event the other is injured

Question 11

an exculpatory clause is generally unenforceable when

Answer 11

1. it attempts to exclude an intentional tort of gross negligence
2. the parties have greatly unequal bargaining power
3. unless the clause is clearly writing and readily visible

Question 12

an exculpatory clause is usually unenforceable when

Answer 12

the affected activity is in the public interest, such as medical care, public transportation, or some essential service

Question 13

Unconscionable contracts

Answer 13

a court refuses to enforce because of fundamental unfairness

Question 14

The 2 factors that most often led a court to find unconscionable were

Answer 14

1. Oppression- meaning that one party used its superior power to force a contract on the weaker party
2. Surprise- meaning that the weaker party did not fully understand the consequences of its agreement

Question 15

Adhesion contracts

Answer 15

standard from contracted prepared by one party and presented to the other one a “take it or leave it” basis