Greg Told Rick That He Would Be Willing to Pay

question 18

Multiple Choice

Greg told Rick that he would be willing to pay a high rate of interest for a two-month loan of $2000. Rick agreed to lend Greg this amount at an annual rate of 20%, repayable March 1, 2016. Greg agreed to these terms. Greg did not pay on March 1. Rick learned that Greg had recently completed some work for Martinson for which Greg was owed $2000. Now that Greg is in default, which of the following is False?

• A) Rick could sue Greg for breach of contract.
• B) Rick could execute against Greg even if Rick had not obtained judgment against him.
• C) Rick could not place Greg into bankruptcy unless Greg had committed an act of bankruptcy.
• D) If Rick obtained a judgment against Greg, he could compel him to be examined about his income, property, and debts.
• E) Once he has obtained judgment, Rick can garnishee the money owed to Greg by Martinson.

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Definitions:

Treasury Bills

Short-term government securities with maturities ranging from a few days to 52 weeks, often considered risk-free investments.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories.

DSO

Days Sales Outstanding, a financial metric that measures the average number of days that a company takes to collect payment after making a sale.

Seasonal Sales

Sales that fluctuate during certain times of the year due to seasonal factors, such as holidays or weather changes.