How Are the Words and Conduct of a Contracting Party

question 1

Multiple Choice

How are the words and conduct of a contracting party generally assessed?

• A) By reference to a reasonable person in that party's own position
• B) By reference to a reasonable person in the addressee's position
• C) By reference to a reasonable person who is entirely detached from the proceedings
• D) None of the options provided is correct.

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Definitions:

Modified Accelerated Cost Recovery System

A tax depreciation system in the United States that allows for faster asset depreciation in the early years of asset life.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life, used for accounting and tax purposes.

Double Declining-Balance Depreciation

A method of accelerated depreciation which doubles the rate at which an asset’s book value depreciates compared to straight-line depreciation.

Annual Depreciation Expense

The portion of the cost of a fixed asset that is charged as an expense in a particular fiscal year, as a result of wear, tear, and obsolescence.