A Typical Situation Where the Doctrine of Economic Frustration Applies

question 55

True/False

A typical situation where the doctrine of economic frustration applies is when the party suffers a loss when a gain was expected.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing corporation, reducing the number of shares outstanding in the market.

Gain On Sale

The profit realized from the sale of an asset, when the selling price exceeds its original purchase price.

Paid-In Capital

Paid-In Capital is the amount of money that shareholders have invested in a company through the purchase of stock, exclusive of earnings retained in the business.

Par Value

The nominal or face value of a bond, share of stock, or other securities, as stated by the issuing company.