Contracts must have a Lawful Purpose

The video explains that contracts with illegal purposes, such as those involving criminal activities, are unenforceable. It also discusses unconscionable contracts, which are so unfair that enforcing them would be unjust. Contracts that violate public policy, like monopolistic agreements, are also unenforceable. Lastly, the video covers covenants not to compete, which are only enforceable if they are reasonable in terms of time and geographic scope.

Which of the following is an example of a contract with an illegal purpose?

• A contract to sell a car

• A contract to purchase narcotics

• A contract to rent an apartment

• A contract to provide consulting services

What makes a contract unconscionable?

• It is too lengthy

• It is too expensive

• It is extremely unfair to one party

• It is written in a foreign language

In the context of contracts, what does 'unconscionable' mean?

• Unclear in its terms

• Unrelated to business transactions

• Unthinkable to enforce due to unfairness

• Unenforceable due to length

Which type of contract is often subject to limited enforcement due to public policy concerns?

• Covenants not to compete

• Loan agreements

• Real estate contracts

• Employment contracts

What is a reasonable restriction in a covenant not to compete?

• Preventing work in the entire country

• Prohibiting work in the industry forever

• Restricting competition within a 20-mile radius for two years

• Banning employment in any field