Arthur Enters into a Written Contract with James That Requires

question 5

Multiple Choice

Arthur enters into a written contract with James that requires James to sell Arthur's farm. Arthur then hires Katherine to sell his farm without terminating the contract with James. Which of the following statements is true of this scenario?

• A) James can sue Arthur for monetary damages only if their contract was an exclusive agency contract.
• B) James can sue Arthur for breach of contract on the grounds of duty of cooperation and ask for specific performance.
• C) Arthur has the authority to enter into a contract with Katherine without terminating the contract with James.
• D) If James has not completed the duties assigned to him in the contract, Arthur need not compensate James for his services.

---

Definitions:

Marketable Securities

Financial instruments that can be easily converted into cash with minimal loss of value, often used for short-term investments.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business.

Debt-To-Equity Ratio

A metric that shows the balance between the amount of a company's assets financed by owners' equity and that financed by debt.

Working Capital

Working capital represents a company's operating liquidity and is calculated as current assets minus current liabilities.