Zena Enters into a Contract with Steeley Company to Purchase

question 19

Multiple Choice

Zena enters into a contract with Steeley Company to purchase a washer and dryer.She doesn't understand the financing terms,but signs the agreement anyway because she needs the appliances.The financing terms are very unfavorable to Zena,and she is unable to make all of her payments when they are due.Steeley sues.The court would:

• A) be exercising judicial restraint if it requires Zena to pay as she promised, even if the agreement was unfair and unwise.
• B) have to rewrite the contract because that is the only way to be fair to both parties.
• C) have to declare the contract void since it contained terms unfavorable to the weaker party to the transaction.
• D) use the theory of promissory estoppel to remedy any unfavorable terms in the contract.

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Definitions:

Financial Statement Analysis

This is the process of reviewing and evaluating a company's financial statements to make business decisions.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, including revenues, expenses, gains, and losses.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.