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Term 2 Legal Aspects
Contract, Termination of Contracts, Business Documentation, Insurance
| Question | Answer |
|---|---|
| What is contract? | A contract is a legal binding agreement between two parties that can be enforced by law. This is one party does something for another in exchange for a valuable benefit. |
| What are the types of contracts? | Simple contract: Either orally or written it sets out the terms of agreement. Speciality Contract: Both parties agree and sign, seal and delivered. This is a more serious contract than the simple contract and can hold up in the court of law. |
| What is offer and acceptance? | An offer is made when one party indicates to enter in a contract on the terms of agreement, once you, the offeree accepts the offer then it becomes legally binding. |
| What are Intentions and legal relations? | A contract is enforceable if both parties enter an agreement, they both see as legal. For e.g. a friend said they would meet you tomorrow but doesn't show up. That wouldn't be thought as a legal agreement |
| What is the competence of both parties? | Both parties must be able to carry out the terms of the contract that means that they shouldn't be under the age of 16 and should be sound of mind. |
| What is consideration? | Something of value is exchanged by both parties in a contract. |
| What are the methods of the termination of a contract? | Performance Breach Agreement Death Lapse of time Impossiblity |
| What is termination of performance? | All parties agree to hold up their part of the bargain. Complete performance is when the work is done. |
| What is a breach of contract? | When one party fail to carry out their part of the contract. |
| What is termination of agreement? | This is when both parties agree to discharge the contract even if the terms of the contract aren't met. |
| Why is business documentation necessary? 1. | Records provide evidence of setting out details of orders quotes and prices quantities and types of goods and the terms and conditions under which goods will be supplied. |
| Why is business documentation necessary? 2. | Records give details of when goods will be delivered, have been delivered and how much is owed and how much has been paid for good supplied. |
| Why is business documentation necessary? 3. | Records help business needs to keep track of its dealings with other businesses. |
| What is an inquiry? | It's from buyer to seller an inquiry into the goods offered. |
| What is an advice note? | Advises when the good job be sent and how. |
| What is a pro forma invoice or delivery note? | It's from seller to buyer sent with the goods usually in the form of a pro forma invoice and signed by the recipient of the goods. |
| What is an invoice? | It's from cellar to buyer it gives the details of the goods such as their quantities and prices and the total amount due. |
| What is credit note, and debit note? | From seller to buyer set out details for overpayment or underpayment. |
| What is insurance? | Insurance is a financial arrangement where an individual or business pays a premium to the insurer in exchange for protection against potential financial losses. |
| What is the pooling of risk? | This is when those taking out an insurance directly share risk they each pay a small sum into a central pool with understanding that only some of them will need to make claims. |
| What is subrogation? | Once compensation is paid the insurer gains the right to claim from 3rd party's responsible for the loss e.g. A person car is damaged due to another driver's negligence the insurance company would go to the driver that crashed in the car to get the cost. |
| What is indemnity? | Ensures that the insured is compensated for financial laws preventing profit from insurance and putting back the insured into the position it was before. |
| What is contribution? | This means someone taking out insurance cannot claim multiple times for the same event with multiple insurance companies. |
| what is proximity cause? | An insurance company will only cover events that fall within its policy terms and conditions therefore it has to identify the cause to work out whether it should pay compensation for a loss. |
| What is insurable interest? | The insurer must have a financial state in what they are insuring because they think they will have a financial loss like a vehicle or a business. |
| What is utmost good faith? | Requires both the insurer and the insured to disclose all relevant information truthfully. |
| What are life insurance policies? | A tern policy pays out if death occurs during the term of the policy A whole life policy pays out when a person dies regardless of how long they live An endowment policy pays out a lump sum after a specific term or on the death of the policyholder. |
| What are non-life insurance policies? | Product liability insurance Fidelity insurance Vehicle insurance Employers' liability insurance Fire insurance Cyber and digital risk insurance |
| how does insurance facility trade? | Insurance lowers the risk of carrying out business and thus giving businesses more confidence to take part in trade for example insurance can provide compensation when goods are damaged in transit stolen or even not paid for. |
| What is an invitation of treat? | An invitation to treat in business is an invitation to negotiate or make an offer, not an offer itself. Examples include store displays, ads, and price tags. It shows willingness to discuss a deal but doesn’t legally bind the business to sell. |
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