When Parties Agree to Discharge One Party from a Contract

question 345

Multiple Choice

When parties agree to discharge one party from a contract and create a new contract with another party who is to become responsible for the discharged party's performance, this is:

• A) accord and satisfaction
• B) specific performance
• C) novation
• D) equitable remedy
• E) equitable performance

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Definitions:

Cash Dividend Declaration

An announcement by a company's board of directors to distribute profits to shareholders in the form of cash.

Liability Account

An accounting record that captures the amounts a company owes to lenders or suppliers, not yet paid but recognized as obligations.

Legal Binding

A situation or agreement that is enforced by law, holding parties to their commitments or obligations.

Dividends

Money paid out by a corporation to its shareholders, mainly as a division of profits.