If the Object of a Contract Becomes Illegal After the Contract

question 95

True/False

If the object of a contract becomes illegal after the contract is entered into because the government has enacted a statute that makes it unlawful,the parties must still perform their contractual obligations pursuant to the grandfather clause.

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Definitions:

Monthly Interest Rate

The interest rate applied each month on a loan or investment, often derived from the annual interest rate divided by twelve months.

Variable Cost

A variable cost is an expense that varies depending on a company's production volume; they rise as production increases and fall as production decreases.

NPV

An alternate expression for Net Present Value, it represents the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Credit Policy

A set of guidelines a company follows to determine the creditworthiness of its customers and the terms of credit it will offer.