Chapter 1 - People In Business

Question 0

Investor

Answer 0

A person who gives the money (Capital) in the form of loans or shares to the entrepreneur so that they can set up the business, in exchange for q return on investment

Question 1

Entrepreneur

Answer 1

A person who spots an opportunity (a gap in the market) and takes the initiative to set up a business to make money from that opportunity

Involves personal and financial risk

Eg Mark Zuckerberg

Question 2

Employer

Answer 2

A person who hires others to work for them for money because they cannot do all the work themselves or they do not have the certain skills that are essential for running the business

Question 3

Employee

Answer 3

A person who works for an employer in return for a wage

Intrapreneurs can come out of employees

Question 4

Manager

Answer 4

A person who runs a business and makes sure it achieves its objectives
Makes sure the business uses its resources in the best possible way
EG) Michael O Leary Ryanair

Question 5

Producer

Answer 5

Takes raw materials and processes them to turn them into a finished product which they will sell to consumers
Secondary sector of the economy

Question 6

Consumer

Answer 6

A person who buys goods or services for his own personal use.
Can provide entrepreneur with market research info

Question 7

Service Provider

Answer 7

Offers helpful support to an entrepreneur.
Operates in the tertiary sector of the economy
EG) Accountant
Solicitor

Question 8

Interest groups

Answer 8

An organisation of people who share a common goal and will pressure people in authority to make a decision for them. They campaign for their common goal
EG) Greenpeace - Shell Oil
PA - Board Of Management

Question 9

Co-Operative Relationship

Answer 9

Both parties working towards shared goals for a mutual benefit
Win win situation
EG) Investors and Entrepreneurs work together and both wang to be successful

Question 10

Competitive Relationship

Answer 10

Involves two or more rival parties
Both want to be successful
Only one winner - Win Lose
EG) Ryanair and Aer Lingus

Question 11

Dynamic Relationship

Answer 11

Relationship is evolving all the time. Competitive at one time and co-operative at another
EG) Coca Cola and Pepsi

Question 12

Contract

Answer 12

A legally binding agreement between two or more parties in which each promises to do something for the other
Enforceable by law

Question 13

Offer (Agreement)

Answer 13

A promise made when one person enters into a deal in which all the terms of the deal are set out
Must be in oral or written form
***Invitation To Treat: price tag/shop display are not legal offers but are devices to attract customers

Question 14

Acceptance (Agreement)

Answer 14

The other person agrees precisely without conditions

Counter Offer - if they try to change the terms of the deals

Question 15

Consideration

Answer 15

The payment one person gives to the other
Must be of value and real
EG) Shares

Question 16

Intention to Contract

Answer 16

Both parties are in agreement means it is legally binding - will end up in court if it is broken

Question 17

Capacity to contract

Answer 17

All natural persons and legal bodies have the legal right to make a legally binding contract EXCEPT:

1) People under 18
2) People mentally incapacitated- drunk/drugs/insane
3) Diplomats - Diplomatic Immunity

Question 18

Consent to contract

Answer 18

Both parties must give their real, voluntary and genuine permission to enter into a valid contract
They cannot be forced into agreeing -blackmail

Question 19

Legality of Form

Answer 19

Contract must be drawn up in a certain way

An agreement in writing

Question 20

Legality of Purpose

Answer 20

Contract is for a legal transaction

Cannot break the law

Question 21

Termination of a Contract (Ways)

Answer 21

1) Performance- carries out side as agreed
2) Agreement- comes to an end if both parties voluntarily agree to end it
3) Frustration- when one side cannot perform their side due to unforeseen circumstances - impossible to carry out - death or bankruptcy
4) Breach- terminated as soon as one party breaks deal and fails to carry out - breaks a condition

Question 22

Remedies for Breach Of Contract (Ways)

Answer 22

1) Damages- The judge can order the person who broke the contract to pay financial compensation, other person does not lose out financially
2) Specific Performance- The judge orders the person who broke the contract to carry it out exactly as it was said under original terms - innocent doesn’t suffer at all
3) Rescind the Contract- The judge orders the contract to be set aside and that both parties are returned to the position they were in before the contract - frustrated contract