Which of the Following Contracts Is Generally Held to Be

question 52

Multiple Choice

Which of the following contracts is generally held to be unenforceable?

• A)A divisible agreement that is partly lawful and partly unlawful.
• B)Allison enters an illegal agreement but, before performance, withdraws from the transaction.
• C)An exculpatory clause on the back of a parking lot claim check, attempting to relieve the parking lot operator for negligence.
• D)Merle enters a contract and is ignorant of minor legislation that makes the contract illegal.

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Definitions:

Trade or Business

Trade or Business is an activity carried on for the purpose of earning profit by providing goods or services, and is characterized by regularity and continuity.

Section 1231 Asset

A tax term referring to depreciable property or real estate used in a trade or business that, if sold, can result in favorable capital gains treatment.

Ordinary Gain

Gain characterized as ordinary income for tax purposes, typically resulting from the sale of assets not considered capital assets.

Sold

The act of transferring ownership of an item or asset for money or value in exchange.