Which of the Following Occurs When,instead of Canceling a Contract,the

question 49

Multiple Choice

Which of the following occurs when,instead of canceling a contract,the parties substitute a new agreement in place of the original?

• A) Accord and satisfaction
• B) Novation
• C) Substituted contract
• D) Mutual rescission
• E) Alteration

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Definitions:

Indebtedness

The state of owing money or being under financial obligation to another party.

Specific Assets

Assets clearly identified and defined, often mentioned in legal and financial documents, distinguishing them from general or unspecified assets.

Preferred Share

A type of stock that gives holders priority for dividend payments and assets in the event of a company's liquidation but typically does not have voting rights.

Par-value Share

A stock with a face value as specified in the corporate charter beyond which it cannot be sold upon initial offering.