Carl, a Contractor, and Lyle, a Landowner, Have a Contract

question 42

Multiple Choice

Carl, a contractor, and Lyle, a landowner, have a contract whereby Carl is to perform routine construction services according to the blueprints that Lyle has provided. Carl assigns the contract to David, a developer. As a result of this assignment:

• A) Lyle can bring suit based upon detrimental reliance.
• B) Carl has no more rights or responsibilities with regard to the contract.
• C) Carl no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform.
• D) Carl has all of his rights under the contract, but he has no responsibility for the performance of the duties.

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Definitions:

Equity Method

An accounting technique used to record the investments in other companies where the investor has significant influence but does not have full control.

Common Stock

Common stock represents a type of ownership in a corporation, giving holders voting rights and a share in the company's profitability through dividends and capital appreciation.

Brokerage Fee

A fee charged by a broker to execute transactions or provide specialized services.

Fair Value Method

An accounting approach used to assess and assign a market-based value to liabilities and assets.