After an Accident with a Vehicle Licensed to Guardian Security

question 1

Multiple Choice

After an accident with a vehicle licensed to Guardian Security Company,Heidi signs a covenant not to sue Guardian Security for damages in a tort action if it pays for the damage to her car.This covenant is

• A)a bar to recovery only if Guardian Security pays.
• B)an illusory contract.
• C)barred by the preexisting duty rule.
• D)barred by the doctrine of promissory estoppel.

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Definitions:

Nonexcludable

A nonexcludable good or service is one where it is impossible, or highly costly, to prevent someone from benefiting from it, regardless of whether they have contributed towards it, such as public parks or national defense.

Pigouvian Tax

A tax imposed on any market activity that generates negative externalities (costs not borne by the party causing them) to correct the market outcome.

Tradable Licenses

Permits that can be bought and sold, allowing the holder to engage in a particular activity or emit a certain amount of pollutants.

Common Resources

Goods that are accessible to all members of a society but have a limited supply, leading to potential overuse.