ABC Inc and XYZ Ltd Entered into a Written Agreement

question 64

Multiple Choice

ABC Inc and XYZ Ltd entered into a written agreement for the purchase and sale of paper products.That agreement contained a clause that said: "This arrangement is not entered into, nor is this memorandum written, as a formal or legal agreement, and shall not be subject to the jurisdiction of the Law Courts or in any other way be enforceable by law." ABC Inc wants the paper products, but XYZ Ltd refuses to deliver them.Which of the following statements is most likely TRUE?

• A)The agreement is legally enforceable because the clause in question is inconsistent with the rules of offer and acceptance.
• B)The agreement is legally unenforceable because the clause in question was an invitation to treat, rather than an offer.
• C)The agreement is legally enforceable because the clause in question demonstrates that the parties had a meeting of the minds.
• D)The agreement is legally unenforceable because the parties did not intend to create legal relations.
• E)The agreement is legally enforceable because an intention to create legal relations is irrebuttably presumed when two businesses become involved in a commercial arrangement.

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Definitions:

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to operations such as utilities and salaries for managers.

Machine-Hours

A metric to quantify the operational time of machines in the production process, essential for calculating manufacturing costs and efficiency.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products, calculated before the accounting period begins based on estimated costs.

Variable Manufacturing Overhead

This refers to the production costs that change in proportion to the level of manufacturing activity.