Question 1
1. Billy Jones owns a small business and want to limit his monetary liability for his own negligence (negligent acts that cause harm to his customers). Which of the following types of contracts should be used to limit this type of liability?
Covenant not to compete
Unconscionable contract
Exculpatory clause
Nondisclosure agreement
Question 2
1. In which of the following situations would a non-compete agreement (i.e. covenant not to compete) be considered illegal?
At the time that a business is sold.
As part of an employment agreement.
Between two competitors, but not as part of the sale of business or employment agreement. For example, competitor A agrees he will only sell goods in Oklahoma and competitior B agrees to only sell goods in Texas.
None of the above.
Question 3
1. Which of the following are TWO factors an court will consider when determining whether a non-compete agreement is valid?
The geographic region included in the restriction. "Is the geographic region too broad?"
The duration of the non-compete. In other words, the length of time the employee is prohibited from competiting. "Employee cannot compete for a three year period."
All of the above.
None of the above.
Question 4
1. Shawn has been injured by Tom's negligence. Shawn is trying to settle the incident directly with Tom, to avoid going to court. Shawn's medical losses were $5,000 and Shawn says to Tom, "Pay me $5,000 or I'll sue you in civil court to recover my damages." Tom does not want to enter into this contract (i.e. settlement), but feels like he has no choice because of Shawn's threat. Tom agrees, signs the settlement and later claims he does not have to pay the $5,000 because the contract is unenforceable. Which of the following is a correct statement regarding Tom's argument that he does not have to honor the contract?
Tom is correct. He entered into the contract under undue influence.
Tom is correct. He entered into the contract under fraud.
Tom is correct. He entered into the contract under duress, because Shawn threatened civil litigation.
Tom is incorrect. Even though he did not want to enter into the contract, threats of civil action are not sufficient to create a claim duress.

Case Study Questions
1) The Unit Seven folder includes a link to the case of Cardiovascular Surgical Specialists, Corporation, Appellee, v. Robert B. Mammana, M.D., Appellant. Print and read the case and then return to this question and answer the following questions. To receive full credit, your responses must be written in complete sentences, using proper grammar and your answer must thoroughly address all portions of the question. The court decision provides you with very thorough analysis of these issues and student responses should incorporate that analysis. Legal writing does sometimes require exact recitation of rules or principles, but your response should not be be a direct "cut paste" from the case. Explain the relevant principles and standards in your own words.
1. What were the terms of this covenant not to compete?
2. Was this covenant executed as part of the sale of a business or pursuant to an employment relationship?
3. Summarize the rules that the court sets forth regarding what types of conduct CAN and CANNOT be legally regulated in a covenant not to compete.
4. Was this covenant not to compete determined to be valid? Why or why not?

2) The Unit Seven folder includes a link to the case of GEORGIA N. BURD, Plaintiff/Appellant, vs. KL SHANGRI-LA OWNERS, L.P., HIGHGATE HOTELS, INC., and HIGHGATE HOLDINGS, INC., all d/b/a SHANGRI-LA RESORT and JOHN DOE 1-3, Defendants/Appellees.
Print and read the case and then return to this question and answer the following questions. To receive full credit, your responses must be written in complete sentences, using proper grammar and your answer must thoroughly address all portions of the question. The court decision provides you with very thorough analysis of these issues and student responses should incorporate that analysis. Legal writing does sometimes require exact recitation of rules or principles, but your response should not be be a direct "cut and paste" from the case. Explain the relevant principles and standards in your own words.
1. What is the purpose of an exculpatory clause?
2. Briefly explain the facts that led to the signing of the exculpatory clause in this case.
3. The court explains that exculpatory clauses must pass a validity test. What are the elements of the validity test?
4. Discuss whether the exculpatory clause being examined in this case was determined to be a valid or invalid waiver of liability. Explain the court's analysis.

Question 1 1. Billy Jones owns a small business and want to limit...