Chris Hires Delta Corporation to Inspect a House Under a Contract

question 27

Multiple Choice

Chris hires Delta Corporation to inspect a house under a contract drafted by Delta that limits Delta's liability "from any cause" to half of its $400 fee.Delta's inspector passes the house,which Chris buys.Defects soon be?come apparent,requiring repairs costing $10,000.Chris files a suit against Delta.Under the decision in Case 12.3,Lucier v.Williams,the limitation-of-li?ability clause is most likely

• A)enforceable because at the time of the contract,the amount of li?abil?ity was difficult to determine and the limit is reasonable.
• B)enforceable because both parties agreed to it.
• C)unenforceable because at the time of the contract,the amount of li?ability was too difficult to determine.
• D)unenforceable because the clause allows Delta to avoid almost all re?sponsibility for its negligence.

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Definitions:

Z Score Model

A statistical model that predicts the probability of a company going bankrupt based on several financial ratios derived from the company's financial statements.

Financial Ratios

Quantitative metrics derived from financial statement analysis used by investors and analysts to evaluate a company's financial health and performance.

Working Capital

The discrepancy between an entity's immediate assets and its short-term obligations, reflecting its liquidity and effectiveness in day-to-day operations.

Cash Flows

The overall volume of cash transactions into and from a corporation, significantly affecting its liquidity status.