Kelley Borrows $3,000 from Paul and Orally Agrees to Repay

question 55

Multiple Choice

Kelley borrows $3,000 from Paul and orally agrees to repay him in three annual installments. Most courts would hold:

• A) the oral contract is unenforceable because it cannot be performed within one year.
• B) Article 2 of the UCC controls this loan.
• C) the oral contract is enforceable only through the doctrine of promissory estoppel.
• D) the oral contract is enforceable because Paul fully performed his obligation under the contract.

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Definitions:

Consumer Surplus

The gap between what consumers are prepared and can afford to pay for a product or service versus what they end up paying.

International Trade

The exchange of goods and services between countries, driven by comparative advantage and resulting in mutual economic benefits.

Autarky Price

The price of a good or service within a country that is not engaged in trade with other countries, self-sufficiently.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, often visualized as the area above the supply curve and below the market price.