Fact Pattern 10-1 Lulene Makes the Best Lemon Meringue Pies in Mississippi. So

question 185

Multiple Choice

Fact Pattern 10-1
Lulene makes the best lemon meringue pies in Mississippi. So Ellen, who owns Ellen's Old Fashion Cafe, contracts with Lulene to buy 50 pies per week at the price of $5.00 per pie.
Although Lulene took a class in business law, she forgot to get her agreement with Ellen in writing. Lulene and Ellen agreed during a chat. Lulene said: "I will supply you with lemon meringue pies for however long you want them at $5.00 per pie." Ellen said: "That's great, I'll take them." Both women were pleased.
Soon Lulene had a problem. Between a hurricane in Florida and brush fires in California, the price of lemons increased by 200%. Now, instead of the $5.00 per pie price she intended to charge Ellen, she feels she must charge $7.00 per pie to make a little profit.
Lulene calls Ellen with the bad news and Ellen has a fit. She tells Lulene that's too bad, but the deal is off. Lulene says, "That's what you think!" and goes to see Amanda, her attorney.
-Refer to Fact Pattern 10-1. After Lulene offers to supply Ellen with pies for as long as she wants them, Ellen then says "I don't really like lemon meringue, how about blueberry?" The offer was terminated:

• A) by illegality
• B) by lapse of time
• C) by conditionality
• D) by revocation
• E) by counteroffer

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Definitions:

Price/Earnings Ratio

A valuation metric measuring a company's current share price relative to its per-share earnings, used to evaluate if a stock is over or under-valued.

Net Income

The profit of a company after all operating expenses, taxes, and interest are subtracted from total revenue.

Quality of Income Ratio

A financial metric that assesses the ability of a company to translate its earnings into cash, providing insight into financial health and operational efficiency.