A Court Will Not Enforce a Contract If

question 18

Multiple Choice

A court will not enforce a contract if

• A)a party is mistaken as to what the subject matter of the contract was.
• B)one party was unreasonable in using certain words.
• C)the meanings of the words are not clear.
• D)the parties disagree as to the interpretation of important terms.
• E)there are two reasonable interpretations of words in the contract and no indication which is correct.

---

Definitions:

Capital Spending

Expenditures by a company on major physical goods or services that are expected to generate economic benefits in the future.

Residual Dividend Policy

A strategy where a company pays dividends out of the residual or leftover equity only after all project capital needs are met.

Dividend Payout Ratio

Amount of cash paid out to shareholders divided by net income.

Ex-dividend Date

The date on which a stock begins trading without the right to receive the next declared dividend, effectively setting the cut-off for new investors to benefit from the upcoming dividend payment.