B$.$L$.$ Nelson & Associates Inc. entered into a contract with the city of Argyle to design and construct a sanitary sewer collection and treatment facility for the city. The city attempted to get out of the contract by citing certain provisions of the state constitution. These provisions made it illegal for the city to enter a contract for services if it did not have the money to pay for these services. Because the city did not have the funds to pay Nelson, it argued that the contract was illegal and therefore void. Was the city correct? Explain. $[$See: B$.$L$.$ Nelson & Associates, Inc, v$.$ City of Argyle, $535$ S$.$W$\mathrm{.}2$d $906($TX$).]$

Peters entered into a contract to purchase Dowling's business. The following terms were agreed to: $($a$)$ Peters would take over all of