Vicki Entered into a Written Contract to Buy a Car

question 6

Multiple Choice

Vicki entered into a written contract to buy a car from Valley Motors.During the negotiations,the sales representative said that the car had a two-year full warranty.The written contract included a provision that stated,"This writing is the full and final expression of the parties' agreement;anything said before signing or while signing is irrelevant." The written contract did not include a warranty.Two months after Vicki took delivery of the car,she discovered that the transmission needed to be replaced.Vicki claimed that it was covered by the full warranty.Will Vicki be able to present evidence as to the sales representative's statements concerning the warranty?

• A)No.The parol evidence rule will most likely exclude any evidence of the discussion of the warranty.
• B)Yes.The leading object rule will allow evidence as to the discussion of the warranty.
• C)Yes.The evidence is needed because the contract is ambiguous.
• D)No,because the contract was fully executed.

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Definitions:

Time Value

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

Profitability Index

A calculation used to assess the attractiveness of an investment, calculated as the present value of future cash flows divided by the initial investment.

Independent Project

A project that can be pursued without affecting the acceptance or funding of other projects, allowing for standalone consideration in decision-making.

Net Present Value

The contrast in the present value of money received and the present value of money spent over a designated duration, applied in capital budgeting to appraise the profitability of a potential investment.