As part of a larger business plan, Ronald and Margaret devised an arrangement that would involve the shipment of widgets to the Abuc Islands 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 the Abuc Islands, 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

Question

Quizplus · Accepted Answer

The best advice for Ronald and Margaret would be to include a true condition precedent into their agreement. This would mean that the agreement would only come into effect once they receive government approval to ship widgets to the Abuc Islands. If the approval is not granted, the agreement will never come into effect, and they will not be liable for any breach of the Trading with Enemy Islands Act. This is the most effective way to manage their risk without exposing themselves to any potential liability.

As Part of a Larger Business Plan, Ronald and Margaret