Buildco Limited Enters into a Contract That Has an Exemption

question 38

Essay

Buildco Limited enters into a contract that has an exemption clause.Buildco's employees,during the course of constructing the home of Jack,fail to exercise care,as a result of which the home is damaged and Buildco is liable to Jack.Will Buildco be able to rely on the exemption clause?

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Definitions:

Net Realisable Value

The projected sales price under normal business operations minus the anticipated expenses to complete and the estimated costs required for the sale.

AASB 102

An Australian Accounting Standard Board regulation that specifies the accounting treatment for inventories, defining the costing methods and recognition criteria.

Inventories

Inventory held with the aim of disposal in customary business dealings, including products in the creation process intended for such deals, or as raw goods or stock for consumption in generating products or executing services.

Invoice Terms

Conditions specified on an invoice, including payment deadlines, cash discount opportunities, and penalties for late payment.