When the Entire Contract Is Conditioned on Something Else Occurring

question 32

Multiple Choice

When the entire contract is conditioned on something else occurring first,the first event is called a[n] ________.

• A)Advance.
• B)Condition precedent.
• C)Foregoing condition.
• D)Foreseeable event.
• E)Preceding condition.

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Definitions:

Subsidize

Financial support extended by a government or organization to lower the production costs or price of goods and services, making them more accessible to the public.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction, which are not reflected in the transaction's price.

Taxed

The act of imposing financial charges on individuals or entities by a governmental organization in order to fund public spending.

Coase Theorem

A principle that suggests that if property rights are well-defined and transaction costs are negligible, parties will negotiate to correct externalities without the need for government intervention.