Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 per­cent. Diners’ best argument for avoiding payment to Eagle is that
A. performance of the contract is commercially impossible.
B. the agreement violates the mirror image rule.
C. the law has rendered performance of the contract illegal.
D. the specific subject matter of the contract has been destroyeD.
Answer:C
Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 per­cent. Diners’ best argument for avoiding payment to Eagle is that
A. performance of the contract is commercially impossible. B. the agreement violates the mirror image rule. C. the law has rendered performance of the contract illegal. D. the specific subject matter of the contract has been destroyeD.