In an Output Contract, the Seller Can Operate a Factory

question 69

True/False

In an output contract, the seller can operate a factory on a 24-hour-a-day schedule and insist that the buyer take all of the output when that buyer had operated only eight hours a day at the time the contract was made and the buyer had knowledge only of the eight-hour-a-day operating schedule.

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Definitions:

Preemptive Right

The right of existing shareholders to purchase additional shares of new stock before it is offered to the public to maintain their proportional ownership in the company.

Corporate Policies

Guidelines and principles that dictate various aspects of a company’s operations, including ethical conduct, employee relations, and compliance with laws.

Federal Income Taxes

Taxes levied by the federal government on individuals, corporations, and other entities based on their net income.

In Perpetuity

In perpetuity refers to an infinite amount of time, often used in finance to describe payments that continue forever.