Marilyn Contracted with Bravo Builders to Build an Addition to Her

question 49

Multiple Choice

Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need to charge an additional $5,000 for the job. Assuming Marilyn agrees, which of the following is correct?

• A) Marilyn will have to pay $20,000.
• B) This is a contract under seal which is enforceable.
• C) This is a modification of a preexisting contract, which under common law must be supported by additional consideration on the part of Bravo Builders.
• D) This is the settlement of a disputed debt that requires no additional consideration on the part of Bravo Builders.

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Definitions:

Minimal Cash Balances

Minimal Cash Balances represent the smallest amount of cash that a business needs to keep on hand to meet its immediate payment obligations and avoid liquidity issues.

Restrictive Policy

A policy designed to limit or control certain actions, often used in the context of financial lending where certain covenants restrict borrower behavior.

Marketable Securities

Marketable securities are liquid financial instruments that can be quickly converted into cash at a price close to their market value.

Flexible Policy

A strategy or approach that allows for adjustments and modifications in response to changing conditions or information.