Mark Entered into an Oral Agreement to Sell Some Land

question 56

True/False

Mark entered into an oral agreement to sell some land to David. Both sides voluntarily agreed to the transaction, both sides provided consideration, and both had the legal capacity to enter into a contract. The sale was for a legal purchase. Under the statute of frauds, this agreement meets all of the conditions necessary for a valid contract for the sale of the land.

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Definitions:

Opportunity Cost

The expense associated with missing out on the second-best option when a choice is made.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue is available to cover fixed costs and generate profit.

Variable Cost

Costs that change in proportion to the level of activity or volume of production, such as materials and labor.

Cost of Goods Sold

The total cost directly associated with producing the goods sold by a business during a specific period, including labor, materials, and manufacturing overhead.