The State of Transas Has Set a Maximum Interest Rate

question 15

Multiple Choice

The state of Transas has set a maximum interest rate of 12 percent on loans.Matt borrows $10, 000 from Tony to pay off a gambling debt.Both are residents of Transas.They sign a contract, which states that Matt would have to pay $1, 500 as interest in one year to pay off the loan.Later Matt finds out the state usury limit and sues Tony.What is the nature of the contract between Matt and Tony?

• A)It is illegal as it violates gambling statutes.
• B)It is legal as both parties were competent when the contract was signed.
• C)The contract is void as it violates usury laws.
• D)The contract is void as it is a contract to commit a crime.

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Definitions:

Mucous Membranes

The moist tissue layers lining body cavities or passages that communicate with the exterior, such as the mouth, nose, and lungs.

Sodium

A chemical element (symbol Na) that is essential for the body in small amounts but can be harmful in excess, often influencing fluid balance and blood pressure.

Clear Liquid Diet

A diet consisting only of transparent liquids without any solid foods, recommended for medical reasons to rest the stomach or intestines.

Gelatin

A translucent, colorless, flavorless food ingredient derived from collagen that is commonly used in food products, medications, and cosmetic manufacturing.