When a Party Does Not Have a Legally-Required License to Practice

question 140

Multiple Choice

When a party does not have a legally-required license to practice her profession,can a party who enters into this contract avoid payment to the professional under the contract?

• A) no, the contractual obligation is unaffected by the lack of the required license
• B) no if the licensing requirement is designed to raise revenue, but yes if it is designed to protect the public from unqualified practitioners of the profession
• C) yes if the licensing requirement is designed to raise revenue, but no if it is designed to protect the public from unqualified practitioners of the profession
• D) yes, regardless of the purpose of the licensing statute
• E) yes, in any circumstance where the client was unaware that the professional was lacking the required license

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Definitions:

Statement of Changes

The Statement of Changes outlines the alterations in equity for a specified period, showing how net income and other changes directly affect a company's financial position.

Net Assets

The difference between total assets and total liabilities, representing the owners' or shareholders' equity in a company.

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Operating Capability

The ability of a company to maintain the necessary level of operation to meet its business objectives, often measured by comparing current performance to historical standards.