Question 1

Centre City Properties, Inc., owns and manages a warehouse. DIY Home Improvement Stores agrees to lease the warehouse for six years. Under the lease, DIY is obligated to pay all of the utility costs. Two years into the term, DIY asks Centre City to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees, but later decides it does not want to share the costs and refuses to pay. Is Centre City bound to its agreement to share the utility costs? Why or why not?​

Accepted Answer

The answer of Centre City Properties, Inc., owns and manages...

Question 2

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey​

Accepted Answer

Even though the goods were stolen, Countrywide Trucking Inc. fulfilled its part of the contract by delivering the crates to the specified destination, hence it is entitled to the agreed-upon payment of $5,000. However, it may not be able to recover the stolen goods as they may have to be returned to their rightful owners.

Question 3

A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is​

Accepted Answer

Exculpatory clauses are generally looked upon with disfavor by the courts and are therefore strictly construed against the party seeking to enforce them. Thus, an exculpatory clause in a lease agreement is generally unenforceable.

Question 4

Games Galore Corporation hires Haley, a minor, to create new customized game software for certain clients. Haley signs a contract that requires her to work for Games Galore for eighteen months. Before beginning work, however, Haley tells Games Galore that she will not create new software for Games Galore and that she is going to work for Ideal Worldcraft, Inc., a Games Galore competitor. Is Games Galore's contract with Haley enforceable? Why or why not?​

Accepted Answer

The answer of Games Galore Corporation hires Haley, a minor,...

Question 5

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except​

Accepted Answer

The court is unlikely to consider the seller's level of education when evaluating the unconscionability of a Service contract. Instead, the court will focus on the buyer's level of education, the parties' relative bargaining power, the price of the service, and other factors that may indicate whether the contract is particularly unfair or one-sided.

Question 6

Research Data Corporation sells access to its database of scientific research to users for a certain price per month. Research Data files a suit against its user Tom when, in violation of their contract, he stops making payments. Tom claims that the deal is unconscionable. The court will most likely consider​

Accepted Answer

The court is likely to consider the relative bargaining power of the parties in determining whether the contract is unconscionable, as this is a key factor in determining whether one party was unfairly taken advantage of in the agreement. The other factors listed (geographic area of the relevant market, quality of related services, and relation of this deal to those of other users) are less relevant to the question of unconscionability.

Question 7

Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely​

Accepted Answer

If a court concludes that the covenant not to compete is unreasonable, it may reform it to make it reasonable, rather than striking down the whole provision or awarding damages. This is because the intention of the provision (to protect the buyer's interests) may still be valid, but the restriction in the provision may be too broad or impose an undue burden on the seller's ability to earn a living.

Question 8

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can​

Accepted Answer

Agreements to commit illegal acts are not enforceable in court. Therefore, Gage cannot legally enforce the agreement or obtain damages for the failed crime plan.

Question 9

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can​

Accepted Answer

Petra can enforce the policy or recover the amount of the premiums paid as she is a member of the class of persons protected by the licensing statute. The statute aims to protect consumers from unlicensed insurers, and therefore Petra has legal standing to seek redress.

Question 10

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is​

Accepted Answer

This deal is illegal and against public policy since it involves theft of confidential information. As a result, the agreement is void and unenforceable.

Question 11

Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely​

Accepted Answer

This promise is most likely invalid because it contains unreasonable terms of area and time. Non-compete agreements are only valid if they are reasonable in scope and duration. In this case, the promise not to open a competing store anywhere is overly broad and could prevent Reed from pursuing a legitimate career or business opportunity in the future. Therefore, it is unlikely that a court would enforce this provision of the sale agreement.

Question 12

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can​

Accepted Answer

Holly is only licensed in Iowa and does not have the legal authority to conduct real estate transactions in Illinois. Therefore, Holly cannot collect commission on this sale or foreclose on the property to obtain unpaid amount. If Holly has already received commission payment, it may have to be refunded to the buyer or seller since it was not earned legally.

Quiz 9: Consideration, Capacity, and Legality

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey​

A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is​

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except​

Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely​

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can​

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can​

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is​

Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely​

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can​

Countrywide Trucking Inc. contracts with Dewey to transport crated goods to a certain destination for $5,000. Countrywide delivers the crates, but Dewey does not pay. Countrywide learns that the crates contained stolen goods. Countrywide can recover from Dewey

A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is

Service Corporation markets its service to less educated consumers. In considering the unconscionability of a Service contract, a court will likely consider all of the following except

Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely

Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can

Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can

Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is

Reed agrees to sell his Sports Equipment store to Taylor. As part of the sale, Reed promises not to open a similar, competing store anywhere. This promise is most likely

Holly, a real estate broker licensed only in Iowa, concludes a sale of farmland in Illinois. Holly can