POB Flashcards
(34 cards)
What is a contract
A special legal binding agreement between two or more people
What is an agreement
An understanding or a mutual exchange of promises between two or more persons
What are the parties to a contract
Offeror- the person who made the offer
Offeree- the person whom the offer is made
What is a simple contract
A simple contract may be defined as written, oral or implied by conduct (cannot be enforced by law)
Offer and acceptance
A contract is formed when an offer has been unconditionally accepted (both parties accept)
An offer
This is an indication to one party that they are willing to make a proposal and to be legally bound by it
Acceptance
When the offeree agrees to the terms of the offer made by the offeror
Consideration
The benefit received by both parties either in the form of cash,services or goods
Speciality contracts
They must be signed, sealed and delivered
What is a breach of contract
A refusal of one party to fulfill the obligation of the contract
Types of insurance policies
Life assurance- a promise of financial compensation for events that must happen such as death
Business insurance- they provide protection against financial losses due unexpected events such as fire
Difference between insurance and assurance
Insurance- a contract that provides financial protection against specified risks like car, health and property on the other hand assurance are usually long term contracts that provide cover for events that will happen such as deaths
Insurance might happen but assurance will happen
Two ways insurance is beneficial to the firm
- Helps protect the firm from unexpected financial losses due to events like natural disasters this protection helps the business to continue operating smoothly without facing significant setbacks
- Having insurance enhance the firm’s credibility and reputation
Purpose of three business documents
1.Purchase requisition forms- helps to control the movement of stock and to inform the firm on how stocks are used and by whom
2.pro-forma invoice- it helps both parties understand the transaction before it’s finalized
3.invoice- this document outlines the data of the sale including the items sold, quantities, prices and payment terms
Production
The making of goods or services that can be used or sold to satisfy the needs and wants of people
Difference between production and productivity
Production- the process of combining inputs with Human Resources to create goods or services to satisfy human wants and needs
Productivity- the amount produced per worker, this means that the resources are being used in an effective and efficient manner
Productivity format:
Productivity= output/ goods and services produced OVER input/ workers, money, machinery and raw materials
Extractive production and two examples
The process of obtaining raw materials or resources from the earth or environment examples are mining and fishing
Two examples of service industries in the Caribbean
Tourism service and financial services
What is capital intensive production
Production service which relies heavily on machinery, technology and capital inventory rather than labor
What is labor intensive
A production which relies heavily on human labor rather than machinery or technology
Difference between subsistence production and domestic production
Subsistence focuses on producing enough for one’s own needs while domestic involves producing goods for the boarder market within the country
Two features of small business
Customer service and flexibility in adapting to changing market demands
Explain two level of production
Surplus is when a business produces more goods than needed for immediate consumption or demand while export is when a business produces good specifically to sell to other countries or markets outside its own
