In the Contract Between Gamil's Building Materials Store and Hightrees

question 21

Multiple Choice

In the contract between Gamil's Building Materials store and Hightrees Logging and Lumber Company for the supply of lumber, there is a clause that allows either party to end the contract on 10-days' notice should actions of logging protesters on Hightrees' property bring logging operations to a temporary halt. This clause is

• A) a force majeure clause.
• B) an option to terminate.
• C) a condition subsequent clause.
• D) a frustration of contract clause.
• E) an example of laches.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders, and having the ability to own property, sue, and be sued.

State

An organized political community under one government; a nation or territory.

Promoters

Individuals or companies that undertake the preliminary activities of organizing or setting up a new business or venture.

Preincorporation Contract

An agreement made by the promoters of a company before it is legally incorporated.