A and B Are Negotiating a Contract by Faxes Going

question 66

Multiple Choice

A and B are negotiating a contract by faxes going back and forth between them.During their negotiations,they agree on the subject matter of the contract,the price,and the date of performance.However,both agree that once the negotiations are complete,a formal written contract will be prepared and signed.In this situation

• A)one issue is whether the decision of A and B to put the negotiations into a formal written contract is a mere expression of their desire as to the manner in which the contract transaction will proceed.
• B)one issue is whether the negotiations contain all of the essential elements of a contract.
• C)one issue is whether the decision of A and B to put the agreement that arises out of the negotiations into a formal written contract is a term of the agreement.
• D)one issue is whether the decision of A and B to put the negotiations into a formal written contract is a condition precedent to the formation of a contract.
• E)none of the above

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Definitions:

Terms

Conditions and stipulations that are agreed upon in a contract or agreement between parties.

Face Value

The nominal value printed on a bond, currency, or ticket, which may differ from its market value or purchase price.

Rational Investor

An individual who makes investment decisions based on logic and factual analysis rather than emotion or hearsay, aiming to maximize returns while minimizing risks.

Face Value

The nominal value or dollar value printed on a security, such as a bond or stock, which indicates its worth at issuance or maturity.