In Which of the Following Situations Would the Courts Enforce

question 46

Multiple Choice

In which of the following situations would the courts enforce an oral agreement to pay extra compensation?

• A) A builder promises to complete a contract on the date previously agreed upon if he is given extra compensation.
• B) A police officer promises a neighborhood deli owner that, for a fee, he will keep a sharp lookout for burglars on the nights that he is on duty.
• C) An accountant promises to complete an audit sixty days ahead of time if she is given extra compensation.
• D) In no case will the courts allow the payment of extra compensation when the request is based on an oral contract.

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Definitions:

Opportunity Cost

The cost of foregone alternatives, the value of the next best alternative that is given up when making a decision.

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its competitors, leading to more efficient trade and production patterns.

Absolute Advantage

A situation in which a country, individual, or company can produce a particular good or service more efficiently than another party, using the same amount of resources.

Trade

Trade involves the exchange of goods, services, or both between parties, which can be at the domestic or international level, fostering economic interaction and integration.