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As Part of a Larger Business Plan, Ronald and Margaret

Question 4

Multiple Choice

As part of a larger business plan, Ronald and Margaret devised an arrangement that would involve the shipment of widgets to the island of Abuc in the Caribbean. They are concerned, however, that their plan might violate the Trading with Enemy Islands Act, which prohibits the export of goods to certain Caribbean nations. Ronald and Margaret nevertheless want to immediately draft a document that sets up a structure for the shipment of widgets to Abuc, but that will not expose them to liability if, after seeking government approval for their plan, they learn that widgets cannot legally be sent to Abuc. As a matter of risk management, which of the following statements provides the best advice? Ronald and Margaret should insert


A) an option to terminate into their agreement.
B) a condition precedent into their agreement.
C) a true condition precedent into their agreement.
D) an exclusion clause into their agreement.
E) a condition subsequent into their agreement.

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