An Alternative to a Contract Is a Casual Understanding Between

question 8

Essay

An alternative to a contract is a casual understanding between the parties.Explain the disadvantages of casual understandings and outline the advantages of ensuring a business understanding is formalized by a contract.

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Definitions:

Cash Concentration Account

A cash concentration account is a bank account used by companies to consolidate and manage their cash flows, usually involving the transfer of funds from multiple accounts into this single account.

Firm Benefits

Advantages or favorable factors resulting from the policies or practices of a particular company, including financial remuneration and non-monetary perks.

Liquidity

How effortlessly an asset can be turned into cash without altering its market price.

J. M. Keynes

An influential British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.