On January 1,2001,Daniel Negotiated a Contract on Behalf of Compu/sys

question 40

Multiple Choice

On January 1,2001,Daniel negotiated a contract on behalf of Compu/sys Inc for the supply of a computer system to Leader Co.The contract called for the supply by Compu/sys Inc of hardware and maintenance services for two years in return for $1 million.Daniel had no authority to negotiate this contract on behalf of Compu/sys.After 18 months of negotiations,Compu/sys agreed to perform the contract in part.The corporation agreed to provide the hardware but not the maintenance services.At the time it made this commitment it had gone bankrupt.Which of the following is TRUE?

• A)Compu/sys ratified the contract even though it did not agree to the obligations under the contract within a reasonable time.
• B)Compu/sys has ratified the contract because it has agreed to some of the obligations under the contract.
• C)Compu/sys has ratified the contract because a bankrupt corporation can ratify a contract.
• D)If Compu/sys has not ratified the contract,Daniel will not be personally liable in any circumstances.
• E)Cumpu/sys did not ratify the contract because a bankrupt principal does not have the capacity to ratify a contract.

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Definitions:

Corporate Tax Rate

The percentage of a corporation's income that it pays as taxes to the government.

CCA Class

Refers to the Canadian Classification of Capital Assets, a system used in Canada for categorizing fixed assets for tax depreciation purposes.