A Restraint That Is Merely Ancillary to a Contract May

question 30

Multiple Choice

A restraint that is merely ancillary to a contract may be legal if:

• A) it attempts to relieve one party from liability for willful misconduct.
• B) its purpose is to restrict trade indefinitely.
• C) its purpose is to recover punitive damages.
• D) it is designed to protect interests created by the contract.

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Definitions:

Binding

A term used to describe an agreement, rule, or law that is legally or contractually enforceable, requiring adherence by the parties involved.

Equilibrium Price

The cost at which the amount of a product available matches the amount of the product desired.

Price Ceiling

A government-imposed limit on how high the price of a product can be charged in the market, usually to protect consumers.

Legal Minimum

A legally established lower boundary on the price at which a good or service can be sold in the market.