Generally,the Courts Will Not Enforce Illegal Contracts,but There Are Some

question 44

Multiple Choice

Generally,the courts will not enforce illegal contracts,but there are some exceptions.Which of the following would be exceptions where the courts would enforce the contract or allow some recovery?

• A) An innocent party is excusably ignorant of the fact of illegality.
• B) A person who enters into an illegal contract later withdraws before the illegal act is done.
• C) A person who used duress to get the other party to sign the contract attempts to enforce the contract.
• D) A and C only are true.
• E) A and B only are true.

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Definitions:

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense over its useful life, reducing its book value on the balance sheet.

Operating Expense

Expenses incurred from normal business operations, including salaries, rent, utilities, and equipment depreciation.

Net Loss

The situation where a company's expenses exceed its revenues during a specific period, leading to a negative bottom line.

Statement of Stockholders' Equity

A financial statement that shows changes in the ownership interest of a company's shareholders, including contributions, distributions, and earnings.