Castner Orally Agreed to Purchase a Desk from the Arman

question 39

Multiple Choice

Castner orally agreed to purchase a desk from the Arman Furniture Company and paid $850 cash. When the desk was delivered the next day, Castner refused to accept it, saying he had changed his mind. When Castner insisted on a return of the $850, claiming that since the agreement was not in writing, he was not bound to accept the desk, Arman Furniture refused. Is Castner correct?

• A) Yes; Castner has a legal right to change his mind.
• B) Yes, if Castner can prove that the desk wasn't worth $850.
• C) No; Castner is bound on the contract because he had paid for the desk in full.
• D) Yes; Castner would not be bound unless the agreement to buy the desk was actually in writing.

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Definitions:

Inflationary Premium

The part of an asset's interest rate that compensates investors for the loss of purchasing power due to inflation.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the real yield to investors.

Market Value

The estimated amount for which an asset or service would trade in a competitive auction setting.

Inflationary Premium

The additional interest rate or return that lenders demand to compensate for the decrease in purchasing power of money due to inflation.