ABC Inc and XYZ Ltd Entered into a Written Agreement

question 72

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 it was written.

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and close to their maturity.

Internal Audits

Evaluations conducted internally to assess the effectiveness of a company's operations, controls, and compliance with regulations and policies.

Collusion

An illegal agreement between parties to deceive or defraud others, often involving price-fixing or the manipulation of markets.

Segregation of Duties

A key internal control that aims to reduce the risk of fraud and error by dividing responsibilities among different people or departments.