Glossary of Terms Flashcards
Apparent Authority or Ostensible Authority
Refers to the person who seems to have been authorized by the principal as an agent to make agreements that must be honored by the principal.
Acid Test
Same as quick ratio, includes only those assets in the numerator of the ratio of assets compared with liabilities that can be quickly converted to cash.
A.S.T.M
American Society for Testing and Materials, an organization that develops and publishes standard specifications on many products.
Bill of Material
A list of items needed, sometimes divided between items to be purchased and items to be assembled or manufactured.
Caveat Emptor
Latin for “Buyer Beware”
Common Law
The portion of law inherited from the English system and which is based on previous decisions before the court. The most recent decisions and the closest jurisdictions carry more weight than those that are older or more distant.
Consideration
Something of value given in return for an agreed performance of a contract.
Consequential Damages
Harm or costs which result from some injury other than the harm or cost of the injury itself.
Current Ratio
The value of current assets divided by the value of current liabilities. It is an indication of an organization’s ability to meet its current obligations.
E.O.Q
Economic Order Quantity a quantity to order based on a formula comparing the holding cost and the rate of usage.
F.A.R
Federal Acquisition Regulation
F.O.B
Free On Board the named location where title (ownership) of the goods passes from the seller to the buyer.
INCOTERMS
International business terms that spell out proper abbreviations and definitions for time of payment, payment discounts, place of ownership, and modes of transportation.
Inventory Turns
Inventory turnover ratio calculated by dividing the COGS by the average inventory value.
ISO-9000
Established quality standards
Letter of Intent
Written statement of the preliminary understanding of parties to an agreement; not a contract.
Manufacturers Agent
A non-salaried sales representative usually having a contract with the manufacturer to get a commission on products sold within an agreed area.
Meeting of the Minds
In contract law, the agreement to the terms of a contract and an essential part of a contract.
Merchantable
A product that is suitable for sale and satisfies the purpose intended.
MRO
Maintenance, Repair, and Operating Supplies purchased items not for production or for resale.
OEM
Original Equipment Manufacturer manufacturing companies producing products for sale. Suppliers usually offer lower prices when the items will be used in the manufacture of OEM products.
Quick Ratio
Compares assets to liabilities. Same as acid test, includes only those assets that can be quickly converted to cash. For example, excludes inventory.
RFP
Request for Proposal
S.A.E
Society of Automotive Engineers, an organization that establishes its own set of material standards.
Tare Weight
The weight of the wrapping or packaging alone.
Tender
An offer to perform the terms of the contract.
Time is of the Essence
A statement given in a contract or PO that makes the delivery schedule an essential element of the agreement. Failure to deliver on time becomes a breach of the contract.
Tort
A private wrong or injury
Trade Usage or Usage of Trade
Customary practice in a particular type of business or industry. The meaning of words or language ordinarily associated with a particular type of business or industry.
Unconscionable
An unreasonable term, clause, or language of a contract making the agreement one sided.
Uniform Commercial Code (UCC)
Similar state laws that establish contract terms for buyers and sellers.
