Patrick and Ken Enter into a Contract in Which Ken

question 11

Multiple Choice

Patrick and Ken enter into a contract in which Ken sells his farm to Patrick. According to the contract, Patrick needs to pay $500 to Ken every month for the next ten years in order to settle the purchase. Later, it is found that Ken purposely caused Patrick to become drunk so that he would enter into the contract. Which of the following is most likely to be a consequence of this case?

• A) Patrick will not need to pay Ken because the contract will be held invalid.
• B) Patrick will need to pay a reasonable amount to Ken because housing is a necessity.
• C) Ken will need to choose whether to affirm or disaffirm the contract.
• D) Regardless of the intensity of intoxication, Patrick will be required to pay the contract amount because he signed the contract.

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Definitions:

Capital Investment Analysis

Process of comparing the costs and benefits of a long-term asset investment.

Leveraged Buyout

Acquiring a company using a significant amount of borrowed money (leverage) to meet the cost of acquisition, often using the assets of the company being acquired as collateral.

Trade Credit

A financial arrangement where a buyer is allowed to purchase goods or services and pay the supplier at a later date.

Angel Capitalism

The act of individual investors providing capital for start-up companies in exchange for ownership equity or convertible debt.