Vocabulary Flashcards
What is a requirements contract?
“A requirements contract is one in which the purchaser agrees to buy all of its needs of a specified material exclusively from a particular supplier, and the supplier agrees, in turn, to fill all of the purchaser’s needs during the period of the contract.” Zemco Mfg., Inc. v. Navistar Int’l Transp. Corp., 186 F.3d 815, 817 (7th Cir. 1999) (Indiana law), <em>quoted in</em> BRC Rubber & Plastics, Inc. v. Continental Carbon Co., Nos. 14-1416, slip op. at3 (7th Cir. Nov.5, 2015) (reversing summary judgment).
What does GAAP stand for?
GAAP stands for <strong>generally-accepted accounting principles</strong> (used in the U.S.) Some things to remember:
<ul><li>Public-company financial statements (for U.S. companies) normally must conform to GAAP.</li>
<li>Contract definitions of GAAP usually say something like the following: "GAAP refers to generally-accepted accounting principles <em>consistently applied</em>." </li>
<li>In Europe and elsewhere, the International Financial Reporting Standards (IFRS) are used, not GAAP.
</li></ul>
What does “material” mean (as in, e.g., material information)?
A thing (for example, information) is material if <strong>a substantial likelihood</strong> exists that <strong>areasonable person</strong> would consider the thing <strong>important</strong> in making arelevant decision. See <a>Basic, Inc. v. Levinson</a>, 485U.S. 224, 231-32 (1988).
