Patios R Us contracts with Karl's Concrete to have 35 yards of concrete delivered to a job site it is working on.Payment is to be made 30 days after delivery.Five days after the concrete is delivered,Patios R Us files for bankruptcy and the filing is accepted by the court.Karl cannot sue to enforce the contract and receive payment.

Question

Quizplus · Accepted Answer

The filing of a bankruptcy petition by Patios R Us operates as an automatic stay, which prevents creditors from taking any action to collect debts from the debtor. This stay would prevent Karl from suing to enforce the contract and receive payment.

Patios R Us Contracts with Karl's Concrete to Have 35