Rod Operates a Scrap Metal Business and Contracts to Provide

question 5

Multiple Choice

Rod operates a scrap metal business and contracts to provide ten tons of scrap steel at $50 per ton to be delivered to Pablo in six months. An un?fore?seen shortage of scrap steel suddenly develops, making it impossible for Rod to fulfill his contract for less than $500 per ton. Rod's best de?fense against performing the contract would be

• A) the mirror image rule.
• B) impossibility of performance.
• C) commercial impracticability.
• D) none of the choices.

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Definitions:

Sinking Fund Provisions

A requirement that a borrower regularly set aside funds to repay a debt before or at maturity, often used in conjunction with bonds.

Bond Indenture

The formal agreement between a bond issuer and bondholders, detailing the terms of the bond such as interest rates, maturity date, and other conditions.

Yield To Maturity

The total return anticipated on a bond if held until it matures, considering all interest payments made at set intervals and the principal or face value.

Bond Indenture

A legal document specifying the rights, duties, and obligations of both the issuing company and the bondholders.