Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Onerous contract
- This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
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- January 26, 2021 at 1:28 pm #608099
sir how can a tenant have an onerous rental contract?
January 26, 2021 at 2:02 pm #608111Any conditions in the contract might prove onerous.
For instance, the contract may forbid certain types of working to be carried out in the building. If the tenant is a company and wants to carry out the kind of working forbidden, then this will be onerous for them.
January 26, 2021 at 5:04 pm #608137i totally get you sir. But somehow am a little flustered still. I don’t if its because i encountered this thing sometime in some past paper or what, but i have always thought of onerous contract as a loss making contract. So, is this anyway different from that? Or that my earlier belief was only wrong?
January 27, 2021 at 9:15 am #608200Onerous means troublesome. That does not mean loss-making – all sorts of conditions in the contract could be troublesome without necessarily resulting in losing money.
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