Fact Pattern 10-2 Brad Defends Against a Breach-Of-Contract Suit by College

question 54

Multiple Choice

Fact Pattern 10-2 Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal-a student loan-was unfair because the consideration for the contract was inadequate.
Refer to Fact Pattern 10-2. With respect to Brad's defense, the court will most likely

• A) promise to do something that it has no prior legal duty to do.
• B) perform an action that it is not otherwise legally obligated to undertake.
• C) refrain from allowing the contract to be enforced.
• D) permit the contract to be enforced.

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Definitions:

Notes Receivable

Written promises for amounts to be received within a certain period, recognized as assets on the balance sheet.

Contingent Liability

A potential obligation that depends on a future event arising from past transactions or events.

Allowance For Doubtful Accounts

A contra-asset account that represents the estimated amount of receivables which are not expected to be collected.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its credit sales by dividing net credit sales by the average accounts receivable.