Sue and Kevin Kellman Signed a Contract for the Construction

question 13

Multiple Choice

Sue and Kevin Kellman signed a contract for the construction of a cabin near Pinetop.In building the $562,000 cabin,the builder discovered that it had to put the vent for the heating system in the area where the hall closet is located.The result was that the Kellman's had a half-closet there instead of a full-length closet that was open to the floor.The Kellmans:

• A)need not pay for the cabin because of this material breach.
• B)can be compensated under the doctrine of force majeure.
• C)can be compensated under the doctrine of commercial impracticability.
• D)can be compensated under the doctrine of substantial performance.

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Definitions:

Tax Liability

The total amount of taxes owed by an individual, corporation, or other entity to tax authorities.

Taxable Income

The amount of an individual's or entity's income used to determine how much tax is owed to the government.

Permitted Deductions

Allowable subtractions from gross income that reduce taxable income, as defined by tax laws.

Flat Tax

A tax system with a constant rate, where taxpayers pay the same percentage of their income regardless of the level of their income.