Raj May Sell His Car to Hazel for $1,000 on Friday

question 100

Multiple Choice

Raj may sell his car to Hazel for $1,000 on Friday if he feels like it. If he refuses to sell her the car on Friday, can she sue him for breach of contract?

• A) yes, because they formed a valid, enforceable contract
• B) no, because Raj made an illusory promise
• C) no, because of the preexisting duty rule
• D) no, because the consideration from Hazel was inadequate

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Definitions:

Installment Note

A debt instrument that requires a series of periodic payments of both principal and interest until the debt is paid in full.

Journal Entry

A record in the books of accounts that documents a financial transaction, showing the debit and credit effects.

Interest Expense

Costs incurred by an entity for borrowed funds, which are typically reported on the income statement within the financing or operating sections.

Notes Payable

A written promise to pay a specified amount of money, typically with interest, by a certain date, recorded as a liability on the balance sheet.