Negotiations Between Dave and Mary Resulted in the Following Agreement

question 131

Multiple Choice

Negotiations between Dave and Mary resulted in the following agreement: Dave would sell his property to Mary for the sum of $150,000 with the closing date to be August 10. When the two completed their discussion, Mary paid Dave $5000 as part payment of the purchase price and received a receipt. The contract was not in writing. On August 10, Mary tendered the remainder of the money, but Dave refused to convey the property. Mary sued Dave for breach of contract. On these facts, which of the following is true? (Assume all facts can be proved.)

• A) Mary cannot enforce this contract because the contract was not in writing.
• B) Mary cannot enforce this contract because the contract was not evidenced in writing.
• C) Mary can enforce this contract if the receipt specified the part payment was for the property in question.
• D) Mary cannot enforce the agreement because all of the consideration was not paid.
• E) Mary cannot enforce the agreement because she had not paid Dave all of the money.

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Definitions:

Current Assets

Current assets are short-term, liquid assets that a company owns and are expected to be converted into cash, sold, or consumed within one year or within a business's operating cycle, whichever is longer.

Acid-Test Ratio

A financial metric that measures a company's ability to pay its short-term liabilities with its quick assets (cash, marketable securities, and receivables).

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets on a company's balance sheet until they are consumed or used.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.