Goldhar & Nemoy, a Law Firm, Leases a Fax Machine

question 10

Multiple Choice

Goldhar & Nemoy, a law firm, leases a fax machine from QED Business Machines. The principal is $5,000 and the interest over the five-year term of the lease is $1,000, so that G & M's monthly payment are $100 for 60 months. The lease provides that if any payment is missed, the entire balance of the lease becomes due, and QED may repossess the machine. G & M makes the first 12 payments, then defaults. QED repossesses the machine and immediately re-leases it to another company on the same terms. It sues G&M for $4,800. Which of the following statements is TRUE?

• A)This lease contains an acceleration clause which permits QED to sue for the full balance owing after a default?
• B)G&M may be able to defend on the basis that the acceleration clause is a penalty.
• C)If the acceleration clause is struck down, QED's damages will be limited to the expenses of repossessing and re-leasing the machine.
• D)All of the above are true.
• E)None of the above are true.

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Definitions:

Type B

A personality type characterized by a more relaxed, less competitive, and less stress-prone behavior pattern compared to Type A.

Heart Disease

A broad term for a variety of diseases affecting the heart and blood vessels, such as coronary artery disease, heart failure, and arrhythmias.

Positivity

The practice or tendency of being optimistic in attitude and focusing on the good aspects of any situation.

Good Health

A state characterized by physical, mental, and social well-being, not merely the absence of disease or infirmity.