The Doctrine of Frustration

question 2

Multiple Choice

The doctrine of frustration

• A)if not applied,discharges the plaintiff from her or his contractual obligations.
• B)can be applied in cases where the subject matter did not exist at the time of the agreement.
• C)only applies where there is a Frustrated Contracts Act.
• D)is a practical and reasonable solution to be imposed by a court under extreme circumstances that were not contemplated by the contracting parties.
• E)could be applied successfully as a defence in a case where honouring contractual obligations would bring hardship upon the promisor.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with dividend payment preferences.

Redemption Value

The price at which an issuer can repurchase a bond or debt instrument before it reaches its due date.

Par Value

An arbitrary value that is placed on each share of stock. Par value represents legal capital and not market value.

Paid-in Capital

Funds raised by a company through the issuance of shares, representing the capital contributed by shareholders.