A Enters into a Contract with B Whereby in Consideration

question 40

Multiple Choice

A enters into a contract with B whereby in consideration of the intended marriage of A's daughter to B's son,each of A and B will pay B's son a sum of money.A fails to pay the money and now B's son sues A.In this situation

• A)B's son will succeed because he is a party to the contract between A and B.
• B)B's son will not succeed because there is no privity between B's son and A.
• C)B's son will not succeed because an intended marriage is no consideration at all.
• D)B's son will succeed because a trust relationship was created.
• E)B's son will succeed because the consideration was the marriage of B's son to A's daughter.

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Definitions:

Stockholders' Equity

Represents the owners' residual interest in the corporation's assets after deducting liabilities.

Total Revenues

The sum of money made from sales of goods or services that are central to the business's core activities.

Equity Method

An accounting technique used to record an investor's proportional share of the profits or losses from an investment in another entity.

Cash Dividends

Payments made by a corporation to its shareholder members from its earnings in the form of cash.