If a Restrictive Covenant Is Valid, It Binds Only the Original

question 53

True/False

If a restrictive covenant is valid, it binds only the original grantee in the deed that created the covenant.

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Definitions:

Stand-alone Principle

An approach to evaluating investment decisions without considering any potential impacts from external projects or operations.

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not affect future investment decisions.

Depreciation Cost

The allocated portion of an asset's initial cost over its useful life, recognized as an expense on financial statements.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating short-term financial health and operational efficiency.