Joe Entered into a Contract to Sell His House to Sam

question 126

Essay

Joe entered into a contract to sell his house to Sam for $400,000. Explain under what circumstances this contract would be binding on the parties even where it was not in writing or evidenced by writing.

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Definitions:

Cotter Pins

A pin or fastener used to secure two components together, preventing motion or separation after installation.

Indirect Materials

Materials used in the production process that cannot be directly traced to specific finished products.

Direct Materials

The raw materials directly used in the production of goods.

Period Costs

Expenses that are not directly tied to product production, such as sales and administration expenses, and are charged to the period incurred.