When the Existence of a Contract Changes the Behavior of a Party

question 28

Multiple Choice

When the existence of a contract changes the behavior of a party to the contract, the problem is called

• A)irrational expectations.
• B)adverse selection.
• C)opportunity cost.
• D)moral hazard.

---

Definitions:

Peel-Outs

Rapid acceleration in a vehicle causing the tires to spin and produce smoke, often leaving marks on the road surface.

Ferries

Boats or ships designed to carry passengers, vehicles, or cargo across a body of water, often as part of a regular, scheduled service.

Screening Techniques

Refers to methods used to identify or select specific characteristics or individuals from a larger population based on defined criteria.

Transition

A means of smoothly connecting different parts of a text or speech to ensure a coherent flow of ideas.