As Part of a Larger Business Plan, Ronald and Margaret

question 27

Multiple Choice

As part of a larger business plan, Ronald and Margaret devised an arrangement that would involve the shipment of widgets to the Abuc Islands in the Caribbean.They are concerned, however, that their plan might violate the Trading with Enemy Islands Act, which prohibits the export of goods to certain Caribbean nations.Ronald and Margaret nevertheless want to immediately draft a document that sets up a structure for the shipment of widgets to the Abuc Islands, but that will not expose them to liability if, after seeking government approval for their plan, they learn that widgets cannot legally be sent to Abuc.As a matter of risk management, which of the following statements provides the best advice? Ronald and Margaret should insert

• A)a condition precedent to performance into their agreement.
• B)a true condition precedent into their agreement.
• C)a condition subsequent into their agreement.
• D)an option to terminate into their agreement.
• E)an exclusion clause into their agreement.

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Definitions:

Annual Installments

Payments made once a year, often referring to the repayment schedule of a loan or similar financial obligation.

Equal Payments

Periodic payments of the same amount over the tenure of a loan or mortgage, covering both principal and interest.

Present Value

The contemporary financial worth of a looming sum of money or sequence of cash flows, with a specific rate of return in mind.

Annuity's Payments

Regular fixed payments from an annuity contract, typically made to the holder for life or a specified period.