Contracts of Utmost Good Faith

question 63

Multiple Choice

Contracts of utmost good faith

• A)arise when one party is uniquely situated to know the material facts such as an insurance contract.
• B)are the only contracts that do not require any kind of disclosure.
• C)do not require notification of any changes to previously supplied information.
• D)have no bearing on the law of misrepresentation.
• E)allow parties to lie to each other prior to entering into a contract without any legal consequence attaching to those lies.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up during a financial period.

Contra Asset

An account on a company’s balance sheet holding a balance that is opposite to the normal account balance, such as accumulated depreciation.

Accrued Expense

An expense that has been incurred but not yet paid or recorded in the accounting records.

Annual Property Taxes

Taxes levied by local governments on the value of real estate property, paid yearly by the property owners.