EcoGrow Inc

question 54

Multiple Choice

EcoGrow Inc.contractually agreed to deliver two tons of organic fertilizer on March 16 to Organics Inc.The contract provided for the payment of $1000 for each day the delivery may be delayed.An ice storm closed highways,causing Eco to deliver four days late.What could you likely expect a lawyer representing Organics to argue before the court hearing a dispute over the non-payment of the late fee?

• A) to have the court apply the parole evidence rule to the contract
• B) to ignore the parties' intentions and apply the plain-meaning rule
• C) to have the court apply the rules of construction to the contract
• D) to ignore the rules of construction and apply the entire contract rule

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Definitions:

Receivables Turnover Ratio

A financial metric that measures a company's effectiveness in extending credit and collecting debts, calculated by dividing net credit sales by the average accounts receivable.

Net Sales

The amount of sales revenue remaining after deducting returns, allowances for damaged or missing goods, and discounts.

Accounts Receivable

Funds that customers owe to a business for products or services that have been received but remain unpaid.

Bad Debt Expense

The cost associated with accounts receivable that a company is unable to collect.