People In Business Flashcards
What is a commercial business?
It is a profit making business
What is a non commercial business?
It is a non profit making organisation
eg charities like Bernardo’s
What is an entrepreneur?
It It is a person that spots a gap in a market takes the initiative to set up a business brings the factors of production together and takes the risk of profit or loss
Eg Bill Gates Mirc sunny limited Microsoft
What is an investor?
Investors are people who provide funding for a business and expect a return on their money
Eg stakeholders, banks and government
What is a producer ?
A producer turns raw materials into finished products. They enter into a contract with their supplier and try to make a profit bye keeping costs low and prices competitive
eg cadbury buys milk from a farmer to use in their bars
What are employees?
Employees work for a business in return for a wage or salary
What are managers?
Managers oversee the operation and make decisions to achieve business goals
What is a supplier?
A supplier provides the raw materials or products needed for the business to operate
eg Starbucks buys coffee beans from a supplier to make coffee and then may buy smoothies from another supplier for resale
What is a service provider?
Service providers offer important services that a business needs in order to carry out its operations
eg heating and electrical suppliers as well as solicitors and accountants
What is a consumer?
A consumer purchases the good or services from the business
eg a person buying a can of coke from Tesco
What is the government?
The Government regulates laws and rules for the business and collects taxes
What are interest groups?
interest groups are an organised group of people who come together to campaign for a common goal
They lobby decision makers to influence their decision-making process to promote the interests of their members
eg ICTU: Irish Congress of Trade Unions and IFA: Irish Farmers Association
What is an employer?
Is a person or organisation who hires people to work in return for a wage or salary
What is the role of interest groups?
Lobbying
Applying pressure to the government to make a certain decision.
Boycotting
Ignoring a company or shop.
Picketing
Holding a peaceful demonstration/protest.
Negative advertising
Newspaper articles and press conferences
What are the costs of negative advertising?
Loss of sales & profits.
Increased security.
Advertising to counteract the negative publicity.
PR costs.
What is a cooperative relationship?
When stakeholders work together to achieve a common goal. They act in a manner of mutual benefit.
This produces better results than working alone or against each other.
What are the examples of a Cooperative relationship within a business
Purchasing manager and supplier-
A service provider may ask their supplier for a credit period to be extended when experiencing a period of cash flow problems. If the supplier agrees they will receive increased loyalty and build a customer relationship for future sales. While, the purchasing manager will avoid bankruptcy and penalties as they are allowed time to gain enough cash.
Entrepreneur and Investors-
The investor provides the capital necessary for the entrepreneur to use to develop a new product/service and then they make a return on investment. So the investor wins too by gaining money on return.
What will companies that have a cooperative relationship share?
They will share skills, ideas, costs and profits.
What is a competitive relationship?
It exists when two businesses are pursuing different objectives/goals in an effort to achieve particular objectives at the expense of the other.
What are the examples of a competitive relationship within a business
Two producers/service providers may compete on prices.
Eg. Aerlingus & Ryanair. AND Aldi and Lidl
Consumers benefit from low prices. But it could cause job losses and other businesses lose income.
Employee and Employer- If an employee wants a pay increase due to the increased cost of living the employee will increase their income but the employer will face higher wage costs
What are the benefits to stakeholders of a competitive relationship?
- Decreases its prices
- Increased Choice of product
- Better customer service
-Improved product quality
What is a contract?
It is a legally binding agreement, between two or more people,
that is enforceable by law.
What are the Elements of a legally binding contract?
Offer- Acceptance- Agreement- Intention To Contract- Consideration- Capacity to Contract- Consent to contract- Legality of Form- Legality of Purpose
What is an offer?
A promise by the person making the offer to be bound by the offer provided the terms of the offer are accepted.
The offer can be made orally, in writing, or by conduct and is a clear indication of the offeror’s willingness to enter into an agreement under specified terms.
How is an offer terminated?
An offer is terminated if there is a counter offer, a rejection of the offer or
a revocation (person making the offer backs out).
What is acceptance in the law of contract?
It is when the person or party that has received the offer agrees to the specified terms without changes to any of the conditions in the original offer
If there is a counter offer or rejection of offer there is no acceptance or agreement
What is an agreement?
For agreement to exist there must be a clear, complete, unconditional offer and an acceptance of that offer by another party.
What is invitation to treat?
- It is not an element of a legal valid contract. An invitation to treat is only inviting a person to make an offer that does not have to be accepted.
In Irish Law, an advertisement, a price tag, a shop display or goods on a shelf are not legal offers. They are invitations to treat.
They are an indication that the seller of an item would like to receive offers for it. They are a guide to the price the seller is willing to consider and may possibly accept if offered.
What is the intention to contract?
both parties to the contract must be aware that they are entering into a legally binding agreement that could see them in court if they fail to keep their side of the agreement
eg a supplier agreeing to deliver items to a shop for a certain price and on a certain day. If they don’t show up they can sue. It is a legal contract there is an intention to contract.
Whereas meeting up with someone for lunch and they don’t turn up. It is not a legal contract there is no intention to contract. Can’t sue
What is consideration in a legal contract?
It is when something of value is passed between both parties to a contract and this must happen for it to be legally binding.
It is usually money but can be a good or service.
eg a packet of gum in the shop is bought for a euro. Both the money and the item are consideration.
What is capacity in a legal contract?
It is the legal ability and right to enter into a legal contract
Who has the capacity to enter into a legal contract?
To be legally able to enter into a contract you must be:
-Over 18
-Sober
-Not mentally ill
-Not bankrupt
-Not a diplomat
A company would not have the capacity to contract if it was
-Operating outside its powers
-Bankrupt
What is consent to contract?
Id when both parties enter the contract on their own free will and agree to the contract without undue influence.
If there is no choice, there is no consent. Consent must be honest and voluntary. Both parties must agree to what is in the contract.
What is legality of form?
It is the way the contract is drawn must suit the purpose.
Some contracts must be drawn up in a certain manner in order for them to be legally valid.
Auction = Verbal contract
Hire Purchase agreement = Written contract
House purchase = Written contract
Shopping = Implied contract
What is legality of purpose?
Legally binding contracts must be for legal transactions only and must comply with the law of the land.
eg A judge will not award compensation to a bank robber whose getaway driver did not turn up for work
How is a legal contract terminated?
Frustration
Performance
Agreement
Breach
How does performance terminated a legal contract?
Both parties to the contract carry out their duties as required by the contract/the contract is executed according to the agreed terms
eg A band is booked to perform at a wedding. They perform as agreed and are paid in full.
How does frustration terminate a legal contract?
An unforeseen event prevents the original terms of the contract from being carried out which makes it impossible to complete the contract.
eg death or bankruptcy- - The death of Michael Jackson made it impossible for him to carry out his concerts in London.
How does breach terminate a legal contract?
If one party breaks their contractual obligations for a part of their contract they are said to be in breach.
The second party has the right of action in the courts against the first party who caused the breach and are entitled to compensation.
eg a construction business leaves a
How does agreement terminate a legal contract?
Is when The parties to the contract bring the contract to a conclusion by mutual consent whether or not the purpose of the contract has been achieved.
eg A supplier agrees to supply goods at a certain price and date to a buyer. Both parties agree to end the contract before they started.
What are the Remedies for breach of contract?
Financial Compensation
Rescind contract
Specific performance
How would financial compensation be a remedy for a breach of contract?
It is when the judge offers damages in the form of money to the injured party. The party who broke the contract to pay compensation for any losses incurred due to the breach.
How would specific performance be a remedy for a breach of contract?
The judge orders the party who broke their contract to fulfil its agreed terms and carry out their contractual obligations
eg builders go back and finish building the housing estate they started
What is a condition in a contract?
It Is fundamental to a contract and if broken the contract is invalid.
Damages may be sought by the injured party.
eg a wedding band not showing up to a wedding.
They do not fill a key part of the contract
How would rescinding the contract be a remedy for a breach of contract?
A court orders both parties to return to the position they were in prior to when the contract commenced . The parties return to their original positions and essentially the contract is cancelled.
What is a warranty in a contract?
It is not fundamental to a contract and alone if broken is not a breach of contract. It is a much smaller element of a contract.
eg a wedding band showing up 20 minutes late
Not a serious breach of contract
What is the difference between expressed and implied terms?
Expressed terms are clearly stated while implied terms are inferred from a conduct or behaviour.
What is outsourcing?
Is when large producers contract other producers to make their product under licence.
eg Nike and Adidas
