William obtains a loan from a bank at 4.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 3.5 percent maximum. William's contract with the bank isa. enforceable only if William does not attempt to disfirm it b. enforceable only if the bank does not attempt to disfirm it c. enforceable only if both William and the bank knew of the statute when the contract was signed. d. not enforceable

Question

Business

Atticus Glover

8 April, 08:19

William obtains a loan from a bank at 4.5 percent interest. The state where he obtains the loan has a usury statute that limits interest rates to a 3.5 percent maximum. William's contract with the bank isa. enforceable only if William does not attempt to disfirm it b. enforceable only if the bank does not attempt to disfirm it c. enforceable only if both William and the bank knew of the statute when the contract was signed. d. not enforceable

+1

Answers (1)

Know the Answer?

Leonard Haynes · Answer 1

d. not enforceable

Explanation:

Usury state laws are strict in limiting the maximum limit among interest rates. If the usury statute limits the max interest rate to 3.5%, William's bank is violating it by putting it to 4.5%.

Usury laws are highly strict when it comes to regulations, so this kind of contract is not enforceable.

These laws are specifically tailored by the government to protect consumers from usury practiced by some banks and "loan sharks".