BUSINESS LAW Computers, Inc. (Computers) and Management Enterprises Company (Man
ID: 383243 • Letter: B
Question
BUSINESS LAW
Computers, Inc. (Computers) and Management Enterprises Company (Management) agreed that Computers would sell Management its computing business, including the land on which the business was situated, for $600,000. Both Computers and Management knew at the time the contract was formed that the business and land were actually worth $1,000,000. Is this a valid enforceable sales contract?
A. No, because Computers would not have agreed to sell the business for 40% less than its value unless it was under duress by Management to sell.
B. No, because $600,000 is not valid consideration for a business worth $1,000,000.
C. Yes, provided the contract was in accordance with state statutory law that permits real estate sales for 40% or more below market value.
D. Yes, provided the contract was in writing, in accordance with the Statute of Frauds, and the parties freely consented.
Explanation / Answer
Answer should be
D. Yes, provided the contract was in writing, in accordance with the Statute of Frauds, and the parties freely consented.
Because whenever any transaction take place everything is written and per the mutual agreement. Government should not have any issue till the time company is paying taxes for the same.
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