Four types of contracts that may be illegal under statue

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Reference no: EM132195005

PEMS Co. International, Inc., agreed to find a buyer for Rupp Industries, Inc., for a commission of 2 percent of the purchase price, which was to be paid by the buyer. Using PEMS’s services, an investment group bought Rupp for $20 million and changed its name to Temp-Air, Inc. PEMS asked Temp-Air to pay a commission on the sale. Temp- Air refused, arguing that PEMS had acted as a broker in the deal without a license. The applicable statute defines a broker as any person who deals with the sale of a business. If this statute was intended to protect the public, can PEMS collect its commission?

1. Some types of contracts are illegal if they are in violation of a statute. Name four types of contracts that may be illegal under a statute.(choose 4: contracts to commit a crime/ contracts to commit a tort/ contracts in restraint of trade/ exculpatory/ usury/ gambling/ licensing/ contracts with minors)

2. If a contract is illegal it is (void and enforceable/ void and unenforceable)

3. What type of statute is in issue here? (Criminal/ usury/ gambling/ licensing)

4. Is it likely a federal or state statute? (federal or state)

5. What does the statute require? (brokers be licensed/ brokers be over 21/ brokers protect the public)

6. Did PEMS comply with the licensing statute? (Yes/ No)

7. How did PEMS fail to comply with the statute? ( PEMS acted as a broker in the deal without a license/ PEMS did not notify the state of the deal beforehand/ PEMS failed to post its license)

8. States require licenses to perform certain occupations. What are the two purposes for the licenses?

a. ( to demonstrate that a special skill has been acquired by a person and to protect the public from unauthorized practitioners/ to regulate the number of practitioners in a field/ to regulate competition/ to attract practitioners to the state/ to raise government revenue)

b. ( to demonstrate that a special skill has been acquired by a person and to protect the public from unauthorized practitioners/ to regulate the number of practitioners in a field/ to regulate competition/ to attract practitioners to the state/ to raise government revenue)

9. These two types of licensing statutes are: 1. regulatory, which (regulates practitioners to protect the public/ raises money for the government)and 2. revenue raising, which primarily (regulates practitioners to protect the public/ raises money for the government)

10. States will not enforce contracts entered into by persons who fail to maintain ( regulatory/ revenue-raising)licenses. These contracts are deemed illegal and therefore (void and enforceable/ void and unenforceable)

Reference no: EM132195005

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