A 'Contract' Is

question 19

Multiple Choice

A 'contract' is:

• A)an act that causes harm to another person and gives that person the right to commence litigation to recover compensation or some other civil remedy.
• B)a legally enforceable agreement.
• C)an act that constitutes breach of a statutory provision, giving rise to statutory liability.
• D)a harmful act or omission that leads to prosecution by the State and punishment of the offender.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over others.

Transaction Costs

Expenses incurred when buying or selling goods or services, including fees, taxes, and other charges that make up the total cost of a transaction besides the price of the good or service itself.

Risk Reduction

Strategies or actions taken to decrease or mitigate the impact of uncertainties on business objectives or investment outcomes.

Balance Sheet

A financial statement at a given point in time that shows assets on one side and liabilities and net worth on the other side; because assets must equal liabilities plus net worth, the two sides of the statement must be in balance.