Sam and Betty Sign a Written Contract on June 1

question 10

Multiple Choice

Sam and Betty sign a written contract on June 1 in which Sam will sell his 1999 Honda Accord to Betty for $10,000,not including the CD player which is mounted in the trunk.Sam will remove the CD player from the car and keep it.They will exchange the car and money on June 10.On June 8,Betty tells Sam she will pay an extra $100 if he will include the CD player and Sam agrees.Which is true?

• A) Sam and Betty cannot enter into the additional agreement regarding the CD player because it violates the parol evidence rule.
• B) The additional agreement regarding the CD player is unenforceable because of the parol evidence rule.
• C) The parol evidence rule does not apply to the agreement about the CD player because it was made after the original agreement was made.
• D) The improper attempt to modify the original agreement renders the original agreement void.
• E) The parol evidence rule would apply only if the agreement about the CD player was entered into after June 10.

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Definitions:

Cash Collected

The total amount of money received by a company during a specific period.

Sales Reported

The total revenue recognized from selling goods or services, as documented in financial statements or reports.

Financing Activity

Transactions and events whereby resources are obtained from, or repaid to, owners (equity financing) and creditors (debt financing).

Purchase

The act of acquiring goods or services in exchange for money, constituting a fundamental business transaction.