Julie Was Told by ComputerLand That If She Would Purchase

question 48

Multiple Choice

Julie was told by ComputerLand that if she would purchase ten or more Zip cartridges, she would receive a free cartridge carrying case in the mail. However, shortly thereafter, the supplier of such carrying cases went out of business and could no longer fill orders. Then Julie sued ComputerLand, who used "frustration" in its defense. Which of the following is true?

• A) Since Julie did not specify the source, the agreement is not frustrated.
• B) Iomega, the manufacture of Zip drives and cartridges, would be liable.
• C) Frustration is impossible because it is too late for rescission.
• D) Since the source is destroyed, the agreement is frustrated.
• E) Since the carrying case is free, this agreement lacks consideration.

---

Definitions:

Intrinsic Value

The actual, inherent value of an asset, without respect to market value or external factors.

Market Capitalization Rate

A rate that represents the return expected by investors on a security or a portfolio, typically reflective of the risk and growth prospects.

Earnings Retention Ratio

The earnings retention ratio, also known as the plowback ratio, measures the percentage of net earnings a company retains to reinvest in the business, as opposed to distributing to shareholders as dividends.

Plowback Ratio

A metric indicating the proportion of earnings retained by a company for reinvestment in its operations, rather than distributed to shareholders as dividends.