Author Question: The legal rate of interest is a rate: A) that is higher than the contract rate. B) at which no ... (Read 81 times)

dejastew · **on:** Jun 24, 2018

The legal rate of interest is a rate:
A) that is higher than the contract rate.
B) at which no interest is charged.
C) that is over and above the rate that is lawfully allowed.
D)that is applied when no rate is specified.

Question 2

Franklin, a hobby-shop supplier, and Gordon, a hobby-shop owner, entered into a contract that provided that Franklin would sell Gordon fifty World War II battleship models at Franklin's cost of 2.95 each, plus a reasonable profit. Gordon brought suit to enforce the contract against Franklin, who refused to deliver the models. Franklin claimed that there was no contract because of indefiniteness. Is Franklin correct?

aidanmbrowne · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

D

Answer to Question 2

Yes. The price of the models is indefinite. There is no objective measure of reasonable profit. Thus, the intent of the parties regarding price cannot be ascertained. The court will have to conclude that there is no valid and enforceable contract, and Gordon's action will be dismissed.