A Contract Contains the Provision, "Walter Hamilton Promises to Pay

question 40

Multiple Choice

A contract contains the provision, "Walter Hamilton promises to pay Faye Weeks $1,200 for a 2005 V­6 motor provided that Phelps' Garage approves the quality of the motor." This provision:

• A)makes the contract unenforceable since Walter's promise is illusory.
• B)creates an express condition which must be met before Walter's duty to pay arises.
• C)cannot create an express condition because it lacks the necessary words "on condition that."
• D)cannot be valid since it makes Walter's duty to pay dependent upon the opinion of a third party.

---

Definitions:

Type II Error

A statistical mistake of failing to reject a false null hypothesis; also known as a false negative.

Expected Decision Error Costs

The anticipated costs associated with making incorrect decisions, often used in risk assessment and decision-making processes.

Unsold Merchandise

Items that have not been sold during a specific period, often leading to overstock and potential losses for businesses.

Risk

The uncertainty regarding the loss or gain in the future, affecting decisions in finance and investments.