After an Accident with a Vehicle Licensed to Guardian Security

question 4

Multiple Choice

After an accident with a vehicle licensed to Guardian Security Company, Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car. This covenant is

• A) ​a bar to recovery if Guardian Security pays.
• B) ​an illusory contract.
• C) ​barred by the preexisting duty rule.
• D) ​barred by the doctrine of promissory estoppel.

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Definitions:

Lender

An individual, a financial institution, or a group that provides funds to others with the expectation that the funds will be repaid, typically with interest.

Inflation Rate

The rate at which the cost of goods and services rises within an economy over a specific period.

Nominal Interest

The rate of interest before adjustment for inflation, representing the face value of borrowed money and the income from lending investments.

Frictional Unemployment

A form of unemployment that occurs when individuals are temporarily between jobs, entering the workforce, or transitioning from one position to another.