Fact Pattern 12-A3

question 66

Multiple Choice

Fact Pattern 12-A3
Cut-Rate Construction Company begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay.
-Refer to Fact Pattern 12-A3. If CCC offers, as a reason for the extra $100,000, that ordinary business expenses have increased, the agree?ment is

• A) enforceable as an accord and satisfaction.
• B) enforceable because of unforeseen difficulties.
• C) unenforceable as an illusory promise.
• D) unenforceable due to the preexisting duty rule.

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Definitions:

Outsourcing

The practice of having certain job functions performed outside of a company, typically by another company or individuals, to save costs or access specialized skills not available internally.

Successorship Clause

A provision in a labor contract ensuring that a new owner of a company recognizes and negotiates with the existing union representing the workers.

Management Prerogative Doctrine

A legal principle acknowledging the right of managers to make unchallenged decisions regarding the operational aspects of a business, except where limited by law or contract.

Recognition Clause

A provision in a collective bargaining agreement that identifies the union as the exclusive bargaining representative for a defined group of employees.