Hiram Is About to Agree to Sell a Specific Antique

question 21

Essay

Hiram is about to agree to sell a specific antique book to Natasha for $30 000.Hiram is willing to let Natasha have possession of the goods immediately.Furthermore,he is willing to sell the book on credit and to allow her to pay in ten monthly instalments.However,he is also concerned that she might become insolvent before paying the full price.If that occurred,he would want to be able to recover the book itself,rather than simply sue Natasha.After all,if she becomes bankrupt,she will not have enough money to fully satisfy all of the claims against her.Is Hiram's position truly at risk? If so,is there anything that he can do when creating his contract with Natasha to protect himself? Explain your answer.

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Definitions:

Product Cost

The total cost incurred to produce a product or deliver a service, including materials, labor, and overhead expenses.

Credit Periods

Refers to the specific lengths of time granted by suppliers to customers in which they can pay for goods or services without incurring any interest charges.

Cash Discount

A reduction in the invoice amount by a seller if payment is made within a specified period.

Effective Annual Cost

The total cost of a loan or investment, expressed as an annual rate, including interest and any fees or additional costs.