Kate and Ben Entered into a Contract

question 5

Multiple Choice

Kate and Ben entered into a contract.She promised to transfer 1000 shares in XYZ Corp to him and he promised to personally draft architectural plans to certain specifications for her.Kate transferred the shares to Ben as promised,but he later discovered that he simply lacked the ability to uphold his end of the bargain.Which of the following statements is TRUE?

• A)If Kate promises to release Ben from his obligation to perform the original contract,that promise can be enforced against her through the process of accord and satisfaction if Ben gives some form of fresh consideration,such as a promise to design a web site,instead of draft architectural plans.
• B)Since neither party promised to pay money,the original contract is unenforceable because it is not supported by legal tender.
• C)A seal is necessary for the purposes of an accord and satisfaction.
• D)The contract would be unenforceable under the statute of limitations if the parties had originally agreed that Ben would have more than six years to complete the architectural plans.
• E)Rescission provides the simplest way in which the parties can bring their contract to an end.

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Definitions:

Activity Variance

The difference between planned activity levels or costs and actual activity levels or costs.

Other Expenses

Expenses not directly tied to the production of goods or services, such as administrative and selling expenses.

Budgeting

The practice of formulating a budget to dictate how you’ll use your money, identifying prospective financial aims and the approaches to attain them.

Activity Variance

The gap between planned activity levels and actual outcomes in any sphere of operations, reflecting operational efficiency and planning accuracy.