Consider the Following Two Scenarios

question 2

Multiple Choice

Consider the following two scenarios.
I.The ceiling in Brenda's apartment is damaged by a leak coming from an apartment above. Brenda hires a plumber, who tells her the leak is coming from Owen's apartment. Brenda tells Owen that if he does not pay for her repairs she'll take him to court. Owen agrees to pay. Two weeks later, a wall in his apartment starts rotting away as well and he discovers that the leak causing all the problems is coming from David's apartment.
II.Anglo Industries is the sole producer of aminobutanol in Europe. Anglo has concluded a one year supply contract with Bettercare, which uses the product for the production of vaccines. Anglo wishes to expand its production to vaccines as well and decides not to renew the contract unless Bettercare accepts a price increase of 35%.
In which of these cases could the contract be voidable for duress?

• A) Both I and II.
• B) Only I.
• C) Only II.
• D) Neither I nor II.

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Definitions:

IRR

The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments. It is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cash Flows

The complete aggregate of monetary circulation into and out of a company, crucially influencing its quick assets.

Net Present Value

It involves gauging the current value disparity between cash receipts and disbursements over a set time frame.

Shareholder Wealth

Shareholder wealth is the total value of an investment in a company, often measured by the market value of the shareholder's equity, which includes stock price appreciation and dividends.