Laura, Who Has a Dress Shop, Likes a Certain Style

question 18

Multiple Choice

Laura, who has a dress shop, likes a certain style of dress and reaches an agreement with ABC Co., the designer and manufacturer of the dress, that she will purchase all the dresses of that style that ABC Co. can produce for $100 each. Later, ABC Co. learns of Sam, Laura's competitor, who is willing to pay double what Laura agreed to pay for the dresses. ABC Co., attempts to avoid the agreement with Laura on the basis that the agreement with Laura was vague and that consideration was lacking. Which of the following is the most likely result?

• A) Laura will win on the basis of promissory estoppels.
• B) Laura will win because she had a valid output contract.
• C) Laura will win because she had a valid requirement contract.
• D) ABC Co. will win because the contract with Laura was insufficiently vague.
• E) ABC Co. will win so long as Laura was given sufficient notice of its decision to enable her to obtain dresses from some other manufacturer.

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Definitions:

Required Return

The minimum rate of return an investor expects to receive from an investment.

Growth Rate

The rate at which a company's earnings or revenue grows over a specified period of time, reflecting the company's expansion and performance.

Dividends

Corporate profits that are allocated and paid out to individuals owning stock in the company, effectively sharing a part of the earnings with shareholders.

Cumulative Voting

Procedure where a shareholder may cast all votes for one member of the board of directors.