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Distinguish between adverse selection and moral hazard.
Contractually Bound
Contractually Bound indicates that parties have agreed to specific terms and conditions outlined in a contract, obligating them to fulfill their respective parts of the agreement.
Actual Authority
Legal power granted to an agent by a principal, allowing the agent to act on the principal's behalf.
Implied Warranty
An unwritten guarantee that the goods or services being sold meet certain criteria for use as understood by the buyer and seller.
Implied Warranty
A legal assumption that a product will meet basic standards of quality and functionality, even if not expressly stated in a contract.
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