BUSINESS SECTION 4

NOT DONE

Contract

An agreement made by two or more parties that is legally binding or enforceable by law.

Simple Contracts

Contracts with an offer and acceptance of terms, legally binding without a deed.

Characteristics of simple contract

offer and acceptance, consideration, legality, competence of parties

Speciality Contract

A unique, legally binding agreement under seal, involving specific situations or industries.

Characteristics of Specialty contract

under seal, in writing or printed, more serious and official than a simple contract

Conditions for Offer and Acceptance

offer is made, agreement reached, and offeree accepts the offer

Acceptance Criteria

offer specificity, communication, mode of acceptance, and absolute acceptance in contracts.

offer specifity

only the person who the offer was made to can accept

Invitation to Treat

A pre-contractual communication expressing willingness to negotiate, not a legally binding offer.

Difference between an offer and an invitation to treat

offer is legally binding, express willingness to go in a contract on specific terms. While invite to treat is not legally binding and expresses willingness to negotiate an offer.

Discharge of Contract

refers to the fulfillment or completion of the contractual obligations by the parties involved, leading to the end of the contractual relationship by performance, novation, or rescission.

By perfomance

when both parties fulfill their obligations as per the terms of the contract.

Novation

refers to a situation where a new contract replaces the previous one.

Recission

When the parties agree to cancel the contract all together

Termination of a Contract

premature ending of a contract

Methods of Discharge/Termination

Agreement, death, lapse of time, impossibility, breach of contract, by performance

Importance of business documents

Keep accurate accounts, to record all trnsactions in a systematic way, to have accurate business records

Pro Forma Invoices

Preview of the final invoice, including key details like payment terms, names and addresses of both supplier and customer, and purchase order numbers.

Purchase Requisition Form

Used to order supplies within a business, detailing department, authorization, and goods requested.

Statements of Accounts

Summarize transactions over a period, showing balances and payments made.

Stock Cards

Used to keep check on how much stock a business has in stores and includes recording dates, references, movements of stocks, and balances.

Insurance

Process of transferring risk from one party to another for a price called the premium. Providing compensation for the loss or damaged caused by certain events if they occur.

Types of Insurance

life insurance policies and non-life insurance policies

Types of life insurance policies

Term, whole life/permanent, endowment

Term policy

It pays out if death occurs during the term of the policy

Whole life policy

It pays out whenever a person dies regardless of how long they live

Endowment policy

This pays out a lump sum after a specific term, or on the death of the policy holder.

Key types of non-life insurance policies

Building,fire and equipment, Product liability Insurance, Fidelity, Vehicles, Marine/aviation, Employer’s liability, Public liability, Cyber and digital risks, assurance

Principles of Insurance

pooling of risks, subrogation, utmost good faith, contribution, indemnity, proximate cause, insurable intrest