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Principle Of Business > Legal Aspects Of a Business > Flashcards

Legal Aspects Of a Business Flashcards

1
Q

What is a contract?

A

A contract is a legal binding agreement between two or more persons that is enforceable by law

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2
Q

What is a simple form

A

A simple form requires no special forms and may be written or oral

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3
Q

What is a speciality contract?

A

A speciality contract that is also called a deed or a contract under seal

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4
Q

What should a speciality contract must have

A

Seal
Signature of party
Deliver to all parties involved

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5
Q

Characteristics of simple contract

A

Offer and acceptance,an offer has to be made and there must be a clear unconditional acceptance

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6
Q

Parties of a contract

A

Offeror
Offeree

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7
Q

Explain offeror

A

The person who makes the offer

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8
Q

Explain offeree

A

The person who accepts the offer

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9
Q

What is form of consideration

A

Is the exchange of one thing of value for another

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10
Q

Under consideration contract they are two types of agreement,what are they

A

Bilateral agreement and unilateral agreement

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11
Q

Explain bilateral

A

Where both parties exchange promise with each other

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12
Q

Explain unilateral

A

One party make a promise in exchange for performance

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13
Q

Persons who cannot sign a contract

A

Person of unsound mind
Person under the influence
Alien
Minors

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14
Q

What is good faith in the contract

A

There should be no fraud

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15
Q

What is genuiness in a contract

A

The party must agree to the contract on their own free will

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16
Q

What is possibility in a contract

A

The party must be able to deliver on the agree up on contract

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17
Q

Characteristics of a speciality contract

A

Signing
Sealing

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18
Q

Rules of offer and acceptance

A

The offer must be communicated by the other party

The offer must be general and must be accepted by the specific person that you offer

The offer can be Revoked at any time before acceptance

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19
Q

Several ways that a contract is terminated or discharged

A

1.mutual agreement
2.breach of contract
3.performance
4.impossibility
5.death
6.bankruptcy
7.lapse of time

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20
Q

Mutual agreement

A

This is when both parties agreed to cancel the agreement before it is performed 

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21
Q

Reach of contract 

A

One party side of the contract

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22
Q

Performance

A

When a contract is not fulfilled and completed

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23
Q

Impossibility

A

This is where one or both parties find it humanly impossible to comply with the contract

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24
Q

Death

A

This is where one of the party involved in the contract dies

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25
Q

Bankruptcy

A

When one party loses all their money and assets and to uphold the contract

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26
Q

Lapse of time

A

This is where non-performance of one party has a breach in the contract during a specified time. Period.

27
Q

Letter of enquiry

A

This is used when people are organization wishes to find information about a product

28
Q

Invoice

A

One of the most important documents is an invoice. This document goes from the seller to the buyer, informing the buyer of what he or she holds

29
Q

Factors of production

A

Land(natural resources)
Labour(Human Resources)
Capital(man made resource)
Enterprise

30
Q

What is production

A

Production is the creation of goods and services to satisfy the needs n wants

31
Q

Define productivity

A

A measure of how efficiently resources are combined and utilized in the firms for achieving the desired outcome

32
Q

What is capital

A

Capital is anything that is money which is use to start or secure a business

33
Q

Eg of capital

A

Money,loan or personal assets

34
Q

What is a small business

A

A privately owned corporation partnership or sale partnership that has fewer employees and less annual revenue than a corporation or regular sized business

35
Q

Micro enterprises has how man employees

A

Fewer than 10 employees

36
Q

Small enterprises has how many enployees

A

10-49

37
Q

Medium sized enterprise has how many employees

A

50-249

38
Q

Large enterprises have how many employees

A

250 or more people

39
Q

Functions of a small business

A

Supplying goods and services that satisfy demand

Creating employment

Making a profit

40
Q

Advantages of a small business

A

Increase competition for larger firms

Generate employment and income

Introduced new products and ideas

41
Q

Disadvantages of a small business

A

The business lacks enterprise in certain areas

Limited ability to service customers due to unavailable resources

Owner find it difficult sourcing finance from financial institution

42
Q

Three benefits of having a partnership business

A

Responsibilities can be shared
Easy to manage
Emotional support

43
Q

What is an entrepreneur

A

person who sets up a business or businesses, taking on financial risks in the hope of profit.

44
Q

What is enterprise

A

This refers to the taking of risks in establishing a business

45
Q

Loss

A

When total sales are not enough to cover all expenses

46
Q

Organization

A

A social arrangement which pursues collective goals such as the production of goods and services.

47
Q

Economy

A

The system within a country which determines the production, exchange and consumption of goods and services.

48
Q

Exchange

A

The voluntary trade of goods and services.

49
Q

Market

A

Any place where buyers and sellers meet to engage in trade. It is also referred to as the demand for a product.

50
Q

Market

A

Any place where buyers and sellers meet to engage in trade. It is also referred to as the demand for a product.

51
Q

Commodity

A

Any final good used for some purpose.

52
Q

Capital

A

Money which is used in the organisation to acquire assets. It also refers to items (factories, equipment, machinery etc.) used to create final products.

53
Q

Labor

A

This is the physical and mental contribution of individuals to the creation of goods and services.

54
Q

Specialization

A

This is the division of labour into specific tasks. A whole process is divided
into several tasks. This helps to speed up the process and may result in an increase in productivity and a decrease in unit cost.

55
Q

Characteristics of money

A

To be divisible
To be durable or long lasting
To be portable and easy to carry around

56
Q

Cheques

A

Payment represented on paper to be taken from consumer’s bank account.

57
Q

Sole trader

A

A person who owns his or her business

58
Q

Characteristics of sole trader

A

Easy to set up
Financed by the owner
Bears all risk and keep all profits

59
Q

Advantages of sole trader

A

Takes all profit
Decision can be made quicker

60
Q

Disadvantages of sole trader

A

Lack of specialized staff
Long working hours
Business usually dissolves if owner dies

61
Q

Partnership

A

An association between 2- 20 people operating a business with the common goal of making a profit.

62
Q

2 types of partnerships

A

Ordinary
Limited

63
Q

Advantages of partnership

A

Easy to set up
Shared work load
Business will not end if one partner dies

64
Q

Disadvantages of partnership

A

Unlimited liability
Difficulty in raising capital

Personalities of partners may cause difficulties in decision making.

Principle Of Business (3 decks)

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