Distinguish between:
a. express and implied contracts
b. executed and executory contracts
c. bilateral and unilateral contracts.
(a) A contract in which the parties manifest assent in words is called an express contract; a contract formed by conduct is an implied in fact contract.
(b) A contract that has been fully carried out by all of the parties is an executed contract. The term executory contract applies to contracts that are still partially or entirely unperformed by one or more of the parties.
(c) When a contract is formed by the exchange of promises, each party is under a duty to the other. This is referred to as a bilateral contract. A unilateral contract occurs when only one of the parties has made a promise.
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Which of the following observations is true?
a. Scrap materials are not by-products of the manufacturing process. b. Spoiled units have imperfections that can be economically corrected. c. Defective units have imperfections considered correctable. d. Defective units are sold as items of inferior quality "seconds."
A firm's weighted average cost of capital (WACC) is:
A. set by the board of directors of the firm, because it is the benchmark they use to evaluate members of the senior management team. B. regulated by the Internal Revenue Service (IRS), because tax-deductible debt is included in the computation. C. determined by participants in the financial markets, because investors set the minimum return they require (demand) to provide the funds the firm invests in capital budgeting projects. D. the same as the average internal rate of return (IRR) the firm earns on its assets. E. the combined net present value (NPV) of all the capital budgeting projects in which the firm invests.
Virtual organizations ________ whereas modular organizations ________.
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