Mary Was an Architect and Was One of Four Members

question 73

Multiple Choice

Mary was an architect and was one of four members who joined an LLC that was going to develop a large new residential subdivision over the next several years.Mary agreed that as part of her contribution of capital she would contribute $100,000 and would provide 300 hours of time working on the architectural design of homes to be built by the LLC.Unfortunately,as Mary was out enjoying a walk one day,a driver in a sport utility vehicle was talking on a cell phone and struck Mary,killing her.When she was killed,Mary had paid $60,000 of her cash contribution and had already provided 240 hours of the design services.In these circumstances:

• A) Mary's death discharges any unperformed obligation to contribute capital in the form of services,but her estate would be obligated for the unpaid $40,000.
• B) Mary's death discharges any obligation to contribute capital in either cash or services.
• C) Mary's death discharges neither obligation. Her estate will be obligated to pay the $40,000 and the fair value of the unperformed architectural services.
• D) Mary's death would normally discharge neither of the obligations,but because the architectural services were based on Mary's particular skill and judgment,her estate is liable only for the unpaid cash contribution.
• E) Mary's death discharges neither obligation,but her estate is liable only if payment of the amounts does not create an undue hardship for any beneficiary of her estate.

---

Definitions:

Study Group

A small group of people who meet regularly to discuss and learn about a specific subject together.

Study Time

Allocated periods dedicated to learning or reviewing educational material.

Preface

An introductory section of a book that provides insights into its purpose, scope, and background, written by the author.

Key Terms

Significant words or phrases that are crucial to understanding the main concepts or topics being discussed.