Shinji Contractually Agreed to Record a Concert for Keith

question 63

Multiple Choice

Shinji contractually agreed to record a concert for Keith.The concert was to occur on November 8 and Keith was to pay a price of $10 000 on the same day.On October 15, Shinji informed Keith that he would not be able to record the concert.On November 2, Keith entered into a contract with his good friend, Manfred.Under the terms of that agreement, Manfred was required to record the concert on November 8 and Keith was required to pay $25 000.The evidence indicates that Keith could have easily hired someone other than Manfred for $17 000.Which of the following statements is TRUE? A court would probably order Shinji to pay Keith

• A)$25 000.
• B)$17 000.
• C)$15 000.
• D)$10 000.
• E)$7000.

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Definitions:

Legal Bankruptcy

A legal process whereby individuals or businesses unable to meet their debt obligations can seek relief from some or all of their debts.

Protective Covenants

Clauses in loan agreements that are designed to protect the lender by restricting the borrower’s actions, such as limiting dividends, adding debt, or asset sales.

Technical Insolvency

A situation where a company is unable to meet its short-term liabilities with its current assets, despite possibly having a greater amount in long-term assets.

Systematic Risk

The risk inherent to the entire market or market segment.