Which of the following statements regarding an option is false?
a. An option may not be exercised after the expiration of the option term.
b. Consideration needs to be provided in exchange for granting the option.
c. The option binds the optionee to performance.
d. An option does not provide the optionee the right to use the land during the option period.
Answer: c. The option binds the optionee to performance.
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Myles Software, Inc., a wholesale distributor of software computer products, borrowed $100,000 from the Gem Finance Co. secured by Myles' present and future inventory and accounts receivable and the proceeds thereof. The parties signed a financing statement which described the collateral and was filed in the appropriate state office. Myles subsequently defaulted in the repayment of the loan and Gem attempted to enforce its security interest. Myles contended that Gem's security interest was unenforceable. In addition, Johns, who subsequently gave credit to Myles without knowledge of Gem's security interest, is also attempting to defeat Gem's alleged security interest. The security interest in question is
A. Valid in respect to Myles but not as to Johns. B. Invalid in respect to both Myles and Johns. C. Invalid in respect to Myles but not as to Johns. D. Valid in respect to both Myles and Johns.
Based on the information in Scenario C, which of the following outcomes would you most expect if business drops off dramatically for Hank Corp.?
A. Vito would lay off most of his workforce. B. The members of the entire company would agree that they should each cut their hours by 15 percent so that no one is laid off. C. Vito would sell the company and move to New Jersey. D. The members of the company would go on strike. E. Vito would charge more for the consulting services so that he can make ends meet.