A and B Enter into a Contract Whereby a Agrees

question 4

Multiple Choice

A and B enter into a contract whereby A agrees to supply B with 10 000 tins of tuna at the rate of 1000 tins per month from his tuna factory in Bayport,Nova Scotia,and B agrees to pay A $2 per tin.A supplies 1000 tins of tuna,but before he can collect,his factory is destroyed by fire.If the contract is discharged by frustration,which of the following statements is correct?

• A)A must obtain the tuna from another source to satisfy the contract.
• B)B will have to pay A the sum of $2000 because there was no deposit.
• C)Only future obligations are discharged,and B must pay A the sum of $2000.
• D)All obligations under the contract are discharged,A and B's obligations are both discharged,and B does not have to pay A the sum of $2000.
• E)B will not have to pay A the sum of $2000 because there is no longer a contract.

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Definitions:

Export

The selling of goods or services produced in one country to buyers in another country.

Import

The process of bringing goods or services into one country from another for the purpose of selling.

Domestic Price

The price at which goods or services are sold within a country's borders, unaffected by import or export tariffs.

Equilibrium Level

The state at which market supply and demand balance each other, resulting in stable prices.