Which of the Following Is True Regarding Any Deduction in Damages

question 25

Multiple Choice

Which of the following is true regarding any deduction in damages to which Roland is entitled?

• A) Roland is not entitled to any deduction because he was the breaching party.
• B) Roland is entitled to a deduction for the delivery expenses only if he can show that Selina agreed in writing to deduct those in the event of a breach.
• C) Roland is entitled to a deduction for the delivery expenses only if he can establish that Selina either knew or should have known that he would be unable to pay for the furniture.
• D) Roland is entitled to a deduction for the delivery expenses because that was a savings to Selina.
• E) Roland is entitled to a deduction for the delivery expenses because Selina breached the contract by not delivering the furniture to him and then pursuing an action for damages.

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Definitions:

Break-even Sales

The amount of revenue from sales that equals the total of variable and fixed costs, with no profit or loss.

Variable Cost

Variable costs are expenses that change directly and proportionally with the level of production or business activity, such as materials and labor costs.

Wage Contract

A formal agreement between an employer and an employee or labor union that outlines the terms of employment, wages, and conditions.

Margin of Safety

The difference between actual or expected sales and the break-even point, indicating the amount of sales that can decline before a firm incurs a loss.