Anmool Verbally Agreed to Build a Deck for Nikki for $1000

question 91

Multiple Choice

Anmool verbally agreed to build a deck for Nikki for $1000 by the 15th of September, in time for a lavish backyard barbecue she was planning. On September 13th, Nikki became concerned at Anmool's lack of progress. Anmool told Nikki he would complete the deck on time, for an additional $200. Nikki agreed and Anmool completed the deck on time. Which of the following is correct?

• A) Nikki owes Anmool $1000 and there is no binding obligation with respect to the additional $200 because Anmool had an existing duty to complete the deck on time.
• B) Nikki owes Anmool $1200, because that is what she agreed to, and such contracts are binding.
• C) Problems of consideration can be raised only in the commercial context, not when the parties involved are both individuals.
• D) Nikki does not owe Anmool anything because his lack of professionalism vitiated the contract.
• E) No legal obligations arise because the agreement is not in writing.

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Definitions:

Earnings Rate

The rate of return on an investment or project, often expressed as a percentage of the investment's cost.

Compound Interest

This refers to the calculation of interest on the beginning balance of a loan or deposit, adding in the interest that has built up over time from prior periods.

Present Value

The value as of now of a future amount of money or subsequent cash flows, based on a chosen return rate.

Compound Interest

Interest that is determined by taking into account not only the original principal of a deposit or loan but also all the interest that has been compounded in previous cycles.