When someone contracts to do a task but fails to put full effort into the performance of an agreement,yet the lack of effort is not independently verifiable,this lack of effort constitutes a
A) breach of contractual obligations
B) denial of good guarantee
C) loss of reputation
D) moral hazard

Question

Quizplus · Accepted Answer

The lack of effort without verifiable evidence is indicative of moral hazard, which occurs when an individual or entity takes a risk because they are not responsible for the outcome. In a contract, moral hazard occurs when one party shirks their duties because they are not ultimately responsible for the outcome of the agreement. This is different from a breach of contractual obligations, which is a clear violation of the terms of the agreement. Denial of good guarantee and loss of reputation are not relevant in this context.

When Someone Contracts to Do a Task but Fails to Put