Which of the Following Statements Is Correct with Respect to a Contract

question 51

Multiple Choice

Which of the following statements is correct with respect to a contract for the purchase of goods?

• A) Where a breach of a condition is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
• B) Where a breach of a condition is involved, the contract is still in force and the victim of the breach must still perform her side of the agreement.
• C) Where a breach of a warranty is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
• D) The purpose of the inclusion of a warranty in a sale of goods contract is to force the seller of those goods to repair the goods if they are defective.
• E) The purchaser has a claim against the manufacturer only if the goods purchased are defective.

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Definitions:

Net Income

The net income of a business once all costs and taxes are deducted from the total earnings.

Operating Cash Flow

The cash generated from a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

Earnings Before Interest And Taxes

A financial metric indicating a company's profitability before expenses from interest and taxes are deducted.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up.