CHAPTER 17 ILLEGALITY AND PUBLIC POLICY True/False Questions 1.Courts will not order performance of an executory contract that is for an illegal purpose. 2.Courts do not normally order rescission of executory contracts that were formed for illegal purposes. 3.Locus poenitentiae means “let the buyer beware.” 4.In most states, it is illegal for a real estate broker to prepare a real property deed. 5.Contracts that impose an interest rate above the maximum amount permitted by state statute are usurious. 6.A complete defense to price fixing is the reasonableness of the price charged. 7.The Robinson-Patman Act requires that all consumer customers be charged the same price for the same item. 8.In an exclusive dealing agreement, parties agree to deal solely with one another in the sale and purchase of stated goods or services. 9.Agreements not to complete are equally enforceable as stand alone contracts and as provisions in other contracts. 10. Whether or not a contract is unconscionable is a question of fact for a jury. 11. Contracts of adhesion are illegal per se and will not be enforced by the courts. 12. Exculpatory clauses are illegal per se and will not be enforced by the courts. 13. In determining whether contract provisions are enforceable, courts look both to the nature of the product and the relative bargaining power of the parties. 14. Antitrust laws are intended to promote competition in the market place. 15. The disclaimer of liability on a printed ticket that is used only as evidence of ownership is not enforceable. Multiple Choice Questions 1.Whether or not a contract provision is unconscionable is a question of ______ to be decided by the _________. a.fact….jury b.law…jury c.fact…judge d.law…judge

2.Locus poenitentiae means

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Chapter 17 Page 1

b.Let the employer be responsible c.Let the guilty be punished d.A place for repentance 3.Ed entered into a contract with Cindy, who owns a liquor store, to bring in from Canada two shipments of Cuban rum, packaged in a way to disguise the country of origin. It is illegal to import Cuban goods into the United States because of a trade embargo. Cindy took delivery of the first shipment and paid Ed the contract price. After receiving the second shipment, however, she refused to pay for it. What remedies, if any, are available to Ed if he sues Cindy for breach of contract?