Bill Enters into a Contract with Simon to Rework the Flooring

question 46

Multiple Choice

Bill enters into a contract with Simon to rework the flooring in Simon's house. Bill later realizes that he will be unable to fulfill the terms of the contract and communicates this to Simon. Both parties agree that George will rework the floor instead of Bill as stated in the original contract. This type of discharge of contract is described as .

• A) accord and satisfaction
• B) novation
• C) substituted agreement
• D) compromise agreement

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Definitions:

Promissory Note

A written, unconditional promise by one party to pay a certain sum of money to another party at a specified date or on demand.

Amount Due

The total sum of money owed to a creditor by a debtor at a specific date.

Credit Card Expense

The fees and interest costs associated with the use of credit cards by individuals or businesses.

Credit Sales

Sales transactions where the payment is deferred, allowing the buyer to purchase goods or services on account.