Glossary

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Force Majeure

Economy Term

Force Majeure is a legal term derived from the French language, which literally means "superior force." Also known as Act of God, it refers to an event or circumstance beyond human control that makes it impossible, illegal, or commercially impracticable to fulfill a contractual obligation. It is a standard clause found in most commercial contracts and is activated in the event of unforeseeable and uncontrollable circumstances that prevent a party from fulfilling its contractual obligations.

In the industry, Force Majeure is used to protect businesses from unforeseen risks that are beyond their control. Natural disasters, epidemics, wars, revolutions, political sanctions, and other similar events fall under the purview of Force Majeure. It provides legal protection to businesses against claims of breach of contract and liability for damages.

The invocation of a Force Majeure clause empowers the affected party to suspend or terminate the contract without being held liable for breach of contract. It also relieves them of any obligation to perform the contract if the event or circumstance makes performance impossible or impracticable.

In the current COVID-19 pandemic crisis, Force Majeure provisions are being invoked by businesses that are unable to fulfill their contractual obligations due to the lockdown restrictions and supply chain disruption. It is being used as a legal defense to protect businesses from liability claims and to minimize financial losses.

In summary, Force Majeure is a legal concept that provides protection to businesses against unforeseen risks that are beyond their control. It is a standard provision in commercial contracts and is used to relieve businesses of liability for non-performance of contractual obligations due to circumstances beyond their control.

More Glossary Terms Beginning with F

Factory Inventories
inventories represent the value of the end-of-month stocks regardless of stage of fabrication (whether in the form of purchased materials and supplies, work in process, or finished goods). These inventories are valued at cost using any valuation method other than LIFO. Inventories associated with the non-manufacturing activities of your company are excluded.

Economy Term Letter: F
Factory New Orders
A new order is a communication of an intention to buy for immediate or future delivery. Orders data are not collected from industries that have mostly immediate deliveries.

Economy Term Letter: F
Factory Shipments
Manufacturers? shipments measure the dollar value of products sold by manufacturing establishments and are based on net selling values, f.o.b. (free on board) plant, after discounts and allowances are excluded. Freight charges and excise taxes are excluded. Where the products of an industry are customarily delivered to distributors or consumers by the manufacturing establishment (such as in certai

Economy Term Letter: F
Factory Unfilled Orders
Generally, unfilled orders at the end of an accounting period are equal to unfilled orders at the beginning of the period, plus new orders net of cancellations received during the period, less net sales. This includes orders that have not yet passed through the sales account and funded orders (or portions of orders) for which the value of work done has not been reported as sales.

Economy Term Letter: F
Facultative Reinsurance
The reinsurance of all or a portion of the insurance provided by a single policy. Each policy reinsured is separately negotiated.

Insurance Term Letter: F
Fair Access to Insurance Requirements FAIR Plan
The reinsurance of all or a portion of the insurance provided by a single policy. Each policy reinsured is separately negotiated.

Insurance Term Letter: F
Fair Value
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Financial Term Letter: F
Fair Value Hedge
A derivative instrument designated in a hedging relationship that mitigates exposure to changes in the fair value of a recognized asset or liability or a firm commitment.

Financial Term Letter: F
Fannie Mae
Federal National Mortgage Association

Financial Term Letter: F
FASB
Financial Accounting Standards Board.

Financial Term Letter: F
Fast Track
Fast track designation is granted to expedite the review process of applications for approval of new drugs intended to treat serious or life-threatening conditions where potential to address an unmet medical need is demonstrated.

Health Care Term Letter: F
FDA Food and Drug Administration
The Food and Drug Administration of the United States, which, among other functions, regulates medical devices and other therapeutic products used in the United States. The U.S. FDA ensures that medicines, medical devices, and radiation-emitting consumer products are safe and effective. Authorized by Congress to enforce the Federal Food, Drug, and Cosmetic Act and several other public health laws,

Health Care Term Letter: F

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Advance monthly sales
The U.S. Census Bureau conducts the Advance Monthly Retail Trade and Food Services Survey (MARTS) to provide an early estimate of monthly sales by kind of business for retail and food service firms located in the United States. Each month, questionnaires are mailed to a probability sample of approximately 5,000 employer firms selected from the larger Monthly Retail Trade Survey (MRTS). Firms respo

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Affiliate
means with respect to any entity, an entity that is controlled by a other company although the other company owns less than a majority of the other entity.

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Agents and Brokers
Persons or organizations that act as a representative for others in negotiating contracts, purchases, or sales. Agents and brokers typically earn a commission or fee for their services and do not take possession of, or title to, any goods.

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ARPU
Average revenue per user

Economy Term
Balance of payments
Record of transactions between U.S. residents and foreign residents during a given time period. Includes transactions in goods, services, income, assets, and liabilities. It is broken down into the current accounts (international), capital accounts (international), and financial accounts (international).

Economy Term
Balance on current account
Current receipts from the rest of the world less current payments to the rest of the world, formerly called "net foreign investment." Current receipts equal exports of goods and services plus income receipts from the rest of the world; current payments are the sum of imports of goods and services, income payments to the rest of the world, and current taxes and transfer payments to the rest of the

Economy Term
Balance on goods and services
Record of the difference between exports of goods and services and imports of goods and services. In the broad sense, this balance is conceptually equal to net exports of goods and services, which is a component of gross domestic product (GDP).

Economy Term
Bonded Warehouses Manufacturing
Warehouses that are authorized by the United States Customs for storage or manufacturing of goods on which payment of duties is deferred until the goods are removed into Customs Territory. These goods are not subject to duties if reshipped to foreign points.

Economy Term
Brokers
Persons or organizations that act as a representative for others in negotiating contracts, purchases, or sales. Agents and brokers typically earn a commission or fee for their services and do not take possession of, or title to, any goods.

Economy Term
Business sector
All corporate and noncorporate private entities organized for profit and certain other entities that are treated as businesses in the national income and product accounts (NIPAs), including mutual financial institutions, private noninsured pension funds, cooperatives, nonprofit organizations that primarily serve businesses, Federal Reserve banks, federally sponsored credit agencies, and government

Economy Term
CE-marked
A compliance symbol indicating that a product meets the requirements of the European Union (EU) directives that apply to that product. CE stands for Conformit?e Europ?enne, which means European Conformity.

Economy Term
CFTC Commodity Futures Trading Commission
Commodity Futures Trading Commission, an independent agency with the mandate to regulate commodity futures and option markets in the United States.

Economy Term