What Are Two Exceptions to the Rule Requiring Consideration

question 40

Multiple Choice

What are two exceptions to the rule requiring consideration?

• A)A contract under seal and a contract involving a liquidated debt.
• B)A contract under seal and promissory estoppel.
• C)A bilateral contract and a unilateral contract.
• D)Promissory estoppel and an illusory contract.
• E)A contract under seal and an illusory contract.

Understand the impact of off-balance sheet financing on a company's perceived risk.

Calculate required lease payments based on the lessor’s cost of borrowing and desired return.

Determine the Net Advantage of Leasing (NAL) under specific operational and financial conditions.

Understand the concept and implications of a sales and leaseback arrangement and how it can affect risk management regarding asset obsolescence.

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Definitions:

Capacity

The legal ability, competency, or power to enter into a contract.

Legality

The state or quality of being in accordance with the law; adherence to the law.

Simple Contract

A contract that can be either oral or written, as opposed to a formal contract which requires a special form or method of creation.

Informal Contract

An oral or written contract that is not under a seal or is not a contract of record. Also called simple contract.