Which of the Following Events Excuses a Promisor from Performing

question 38

Multiple Choice

Which of the following events excuses a promisor from performing his or her contractual obligations?

• A) a riot
• B) a shortage of materials necessary for production of goods and/or provision of services called for under the contract
• C) an unanticipated increase in the cost of performance
• D) destruction of the subject matter through no fault of either party

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Definitions:

Precautionary Cash Balances

Precautionary cash balances refer to money held by both businesses and individuals to meet unexpected expenses or financial emergencies.

Unexpected Expenditures

Expenses that were not planned or budgeted for, often requiring immediate payment.

Risk-Averse

A description of an investor or decision-maker who prefers to minimize uncertainty or potential loss, favoring safer over riskier options.

Financial Intermediary

An institution that acts as a middleman between savers and borrowers, including banks, investment companies, and insurance companies.