"A Trust Provides Am Exception to the Privity of Contract

question 71

Essay

"A trust provides am exception to the privity of contract doctrine.The contract is enforced by the person to whom the contractual promise was intended to benefit." Explain the meaning of that statement and indicate whether or not it is true.

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Definitions:

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically including features like the principal amount, interest rate, and maturity date.

Equity Securities

Financial instruments that represent ownership in a company or an entitlement to a share in its profits.

Cost Method

An accounting approach used to measure the value of an investment, where the investment's cost includes the purchase price and any costs of acquisition.

Trading Securities

These are securities that a company holds for the purpose of selling them in the near term to profit from price variations, reported at fair value.