business law

book account

A business record of a customer's account which indicates the total amount owed by the client at any given time.  The book account serves as a clear basis for bringing suit on a customer's failure to repay the debt.

 

bill of exchange

A type of negotiable instrument, also known as a "draft", which is a signed, unconditional, written order by the drawer, directing the drawee to pay a fixed sum of money to a third party (the payee) at a determined future date.

For example, a check is a type of bill of exchange.

 

balloon payment

The final, oversized payment due at the maturity date of a loan.  Typically used in car or home loans, the balloon payment consists of the remaining balance due under a loan, including any unpaid principal and interest. 

 

balance sheet

A financial statement that consists of a three-part summary of a company's assets, liabilities, and ownership equity at a particular instance in time.  It is intended to show the financial condition of a company at that time.

The balance sheet states the assets on one side and the liabilities and equity, together, on the other side.  Both sides must balance out with each other.

 

 

arm's length

Definition

Of or relating to transactions between two parties who are independent and do not have a close relationship with each other. Presumably, these parties have equal bargaining power and are not subject to undue pressure or influence from the other party. Transactions of this nature do not give rise fiduciary duties between the parties.

 

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