Chapter 1 People In A Buisness Flashcards
Entrepreneur
- spots an opportunity in market
- uses initiative
- take a risk (financial and personal)
- to make a profit
- EG Mark Zuckerbourg
Investor
- Put money into a buisness
- they can lend money eg bank
- give capital in return for shares (Equity Finance) Eg Alan Sugar, Donald Trump and Dragons Den
Stakeholders in a buisness
1 Entrapenuer 2 Investor 3 Employer 4 Employee 5 Manager 6 Producer 7 Consumer 8 Service Provider 9 Interest Group
Employer
- Someone who hires people for work
- As they cannot do all work themselves or don’t have certain skills essential for running a buisness
- rewarded for work with money, bonuses and more holidays
Employee
- Works for employer in return for a wage
- Carry out Essential tasks
Intrapenuers
- Employees that give their employers ideas to make the buisness more successful
- EG Microsoft employees came up with Xbox
Manager
- run the buisness
- makes sure buisness achieves objectives
- Uses company resources in best possible way
- Eg Michael O Leary Ryanair, Jose Mourinho
Producer
- makes finished products to sell to consumers
- take raw materials uses a manufacturing process to turn them into finished products
- EG Tayto
Consumer
- buys goods and services for personal profit
- provides entrepreneur with market research
Interest group
- Come together and campaign for a common goal
-pressure those who make decisions - by joining forces they have more money and more talent
Eg Greanpeace
Cooperative
- Same objective
- Work together
- help eachother achieve same goals
- win win
- EG Employees cooperate with employers and take voluntary pay cut
Relationships in a business
1Cooperative
2Competitive
3Dependant
4Dynamic
Competitive
-One party wants to be more successful
- win loss
- rivals
EG
-Ryanair vs Aer Lingus
-employees vs employers employees wants money employer wants more profit
-employee vs employee for promotion
Dependent
- Need eachother to be successful
- cannot achieve goals on there own
- Rely on eachother
- EG consumer and producer
Dependent
- Need eachother to be successful
- cannot achieve goals on there own
- Rely on eachother
- EG consumer and producer
Dynamic
- constantly changing
- sometimes competitive, sometimes cooperative
- Eg restaurants compete with eachother all year but come together to organise a town fair which will benefit both
Contracts
- to be Legally binding
-and enforced by law
MUST HAVE
1 Offer 2 Acceptance 3 Consideration 4 Intention to Contract 5 Capacity to Contract 6 Consent to Contract 7 Legalithy of Form 8 Legalithy of Purpose
Service provider
- Provides helpful services to an entrepreneur
- In tertiary sector
- jobs entrepreneurs can’t do
- EG Accountant, Solicitor and Courier
Offer
- An offer is made when one person ask another to enter a deal
- All terms must be clearly set out
- No Conditions
- Offers must be communicated by speaking or writing
- Offers can be terminated before others accept
- Price tag is not an offer its an invitation to threat
Acceptance
- Agree precisely to all terms
- no conditions
- Speaking writing or conduct
- Once an offer is accepted it cannot be changed
- If an offer is accepted but you ask for a change this is called a counter offer
Consideration
- Is the payment one person gives
- It must be real or valuable
- Cannot be for free
- Generally it’s money
Intention to contract
- Must intend for it to be a Legally binding contract
- Fully understand you will end up in court if you breach the contract
- Agreements between businesses always intended to be legally binding
- Agreements between family are not
Capacity to Contract
Have the legal right to make a legally binding contract THE FOLLOWING EXCEPTIONS ARE
- under 18
- mentally incapacitated
- drunk, drugs, insane
- Diplomatic immunity
- Ulta Vires
Consent to contract
- Voluntary and genuine Information
- Not against their will
- No mistakes or lies
Legalithy of form
- Certain contracts must be written up by law on certain legal documents/forms
- If forms are not correct it is not a legally binding contract
- EG buying a house
Legalithy of Purpose
- The document can only be for legal transactions
- No agreement that involves breaking the law is a contract
- EG Bank robbery
Termination of contract
1Performance
2Agreement
3Frustrations
4Breach of contract
Termination of contract
Performance
Both sides carry out their agreement
Agreement
- Both sides agree to voluntarily end a contract
- Usually have to give a month notice
- End contract under mutual understanding
- EG Roy Keane leaves United 2004
Termination of contract
Frustration
- Some unforeseeable event occurs not under the control of the party
- Makes it impossible to carry out task
- EG death or bankruptcy
Termination of contract
Breach ofcContract
- Either side fail to carry out the agreement exactly as agreed
- A condition is fundamental to a contract
- Warranty is not. If you break a war into it is not a breach of contract
Remedies for breach of contract
1 Damage
2 Specific Performance
3 Rescind the Contract
Remedies for breach of contract
Damage
Financial compensation given extra for inconvenience
Remedies for breach of contract
Specific Performance
Judge can order person who broke the contract to carry it out as exactly as agreed
Rescind the contract
Judge returns the party’s to position they were in before contract. Appropriate if contract frustrated
