Where One Party Refuses to Perform His Contractual Obligations, What

question 133

Multiple Choice

Where one party refuses to perform his contractual obligations, what is the risk that the second party runs if he continues to press the first party to perform?

• A) The first party may continue to refuse to perform, and there is nothing the second party can do about that.
• B) The contract may be discharged by frustration.
• C) The first party might expressly repudiate the contract and therefore not be liable for breach.
• D) The first party might breach a condition subsequent.
• E) The second party might receive more damages for which he can't recover compensation.

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Definitions:

Goodwill Impairment

A decrease in the value of a company's goodwill, indicating that the value of acquired assets has fallen below their original cost.

Income Tax Reassessment

The process by which tax authorities review and possibly adjust the amount of income tax payable by an individual or corporation following the submission of tax returns.

Capital Asset

Long-term property or investment that is not easily sold or exchanged for cash without a substantial loss in value.

Consolidated Retained Earnings

The accumulated profits of a corporation and its subsidiaries after dividends have been paid out to shareholders.