Fact Pattern 14-1 (Questions 7-8 Apply)

question 24

Multiple Choice

Fact Pattern 14-1 (Questions 7-8 apply)
Estelle enters into a contract to buy 132 acres from Desmond to subdivide and sell in quarter-acre lots for Country Acres, a residential development.
-Refer to Fact Pattern 14-1.If Desmond breaches the contract,Estelle's remedy would most likely be

• A) a certain ratio of the amount that Desmond has in liquid funds.
• B) a percentage of Desmond's unrealized profit.
• C) the difference between the land's contract and market prices.
• D) specific performance.

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Definitions:

General Partnership

A business structure where two or more individuals own and operate a business in partnership with each other, sharing both profits and liabilities.

Federal Income Tax

A tax levied by the United States federal government on the annual income of individuals, corporations, trusts, and other legal entities.

Limited Life

A concept referring to assets or entities that are not expected to operate indefinitely, having a defined period of effectiveness or existence.

Net Loss

The result when total expenses exceed total revenues during a specific period, indicating financial loss.