Adam Contracts to Sell Ben 100 Widgets for $100 for Use

question 45

Multiple Choice

Adam contracts to sell Ben 100 widgets for $100 for use in Ben's factory.Adam does not know that Ben's factory is closed as it is waiting for supply of widgets from Adam.Will Adam be liable for the damages caused due to late delivery?

• A)Will be liable for compensatory damages.
• B)Will be liable for consequential damages.
• C)Will not be liable for any damages.
• D)Will be liable for nominal damages.

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Definitions:

Note Receivable

A written promise that entitles the holder to receive a specified amount of money at a set date in the future, often bearing interest.

90-Day Note

A short-term debt obligation that matures in 90 days.

Settle Account

The process of paying off or resolving a financial account or obligation.

Percent of Receivables Method

An accounting technique used to estimate the amount of a company's receivables that will not be collected.