John Contracts with Kelly to Buy a Certain Number of Cattle

question 37

Multiple Choice

John contracts with Kelly to buy a certain number of cattle for Kelly's Circle K ranch. John makes a deal with Lawson, the owner of a local herd, and makes a down payment. Kelly fails to pay the rest of the price. Lawson sues John for breach of contract. John's right to hold Kelly liable for any damages that he has to pay is the right of​

• A) ​compensation.
• B) ​cooperation.
• C) ​indemnification.
• D) ​reimbursement.

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Definitions:

Forward Contract

A bespoke contract that allows two parties to trade an asset at a fixed price on a designated date in the future.

Cereal Company

A business entity that specializes in the production and marketing of cereal and grain-based food products.

Hedger

An individual or entity that enters into a financial contract to offset potential losses or gains in a companion asset.

American Call Option

A type of call option that can be exercised at any time before its expiration date for purchasing an underlying asset at an agreed-upon price.