In Lucy VZehmer,the Two Parties Were Drinking in a Bar When Lucy

question 5

Multiple Choice

In Lucy v.Zehmer,the two parties were drinking in a bar when Lucy offered to buy Zehmer's farm.After some negotiation,a written contract was executed.Zehmer claimed the entire episode was a joke and he never intended to sell his farm.The court determined that

• A) since Zehmer claimed to be "high as a Georgia pine" and it was only the liquor talking, there was no contract.
• B) since the contract was written without lawyers present, it was likely not really serious, so no contract was actually formed.
• C) because the terms were fair, the parties are bound by the contract regardless of their intent or capacity.
• D) Zehmer's actions made him appear serious; therefore, he was bound by his act despite what he was inwardly thinking.

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Definitions:

Cotton Products

Items manufactured from cotton, such as clothing, textiles, and other goods.

Accumulated Depreciation

The cumulative amount of depreciation for a tangible asset, representing the total expense allocated to it from the time of acquisition and readiness for utilization.

Book Value

The net value of a company's assets as recorded on its balance sheet, often compared to its market value.

Equipment Account

An account on the balance sheet that represents the total cost of machinery and equipment owned by a company, less accumulated depreciation.