Ms Marshall 1

Chapter One

People in BusinessUnit 1 ndash important for Q1 (long qrsquos)

and for ABQ

Ms Marshall 2

People in Business

1 Role of Stakeholders

2 Relationships between

Stakeholders3 Contract Law

Ms Marshall 3

Stakeholders- people affected by how a business is

run

Entrepreneur

Investor

Employer

Service Provider

EmployeeManager

Producer

Consumer

Interest Groups Government

Ms Marshall 4

Section 1 Role of Stakeholders

bull Entrepreneurbull Spots an opportunity and

takes the initiative to set up a business in order to make a profit

bull They are risk takersbull Financial amp Personal Riskbull Eg Tony Ryan set up

Ryanairbull Bill Gates set up Microsoftbull Gillian Bowler set up Budget

Travel

bull Investorbull Investors provide the finance for the

business (shareholdersbanksstate bodies) and expect a return on their investment

bull Equity Capital ndash Shareholders- Dividends

bull Debt Capital ndash Banks-Interestbull Eg Ulster Bank loaned money to

Gillian Bowlerbull Enterprise Ireland gives grants to

entrepreneurs setting upbull The Body Shop sold a half share in

the business for euro7500

Ms Marshall 5

Role of Stakeholdersbull Employerbull The business itself is the employer It

hires employees to work for them and pay them according to their contract

bull Employers rights includebull Recruiting and selecting the

employeesbull Directing the employeesbull Dismissing unsatisfactory employeesbull Employerrsquos responsibilities includebull Providing a contractbull Payment of wagesbull Providing safe working conditionsbull Obeying employer law

bull Employeebull An employee is a person who works

for an employer in return for a wage bull Employeesrsquo Rightsbull Receiving a written contract of

employmentbull Being paid the agreed wagebull Working in a safe and healthy

workplacebull Freedom to join a trade unionbull Employeesrsquo Responsibilitiesbull Following instructionsbull Doing a fair dayrsquos work for a fair dayrsquos

paybull Being honest and loyal in their work

Ms Marshall 6

Role of Stakeholdersbull Managerbull The manager is responsible

for running the business and making sure that it achieves its objective

bull Must have the skills of leading motivating and communicating

bull Must engage in the activities of planning organising and controlling

bull Michael OrsquoLeary of Ryanair

bull Producers bull Producers are

manufacturers who take raw materials and turn them into a finished product to sell on

bull Eg Coca-Cola Cadburys Tayto Butlers

bull They use the factors of production to make a product land labour capital and enterprise

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 2

People in Business

1 Role of Stakeholders

2 Relationships between

Stakeholders3 Contract Law

Ms Marshall 3

Stakeholders- people affected by how a business is

run

Entrepreneur

Investor

Employer

Service Provider

EmployeeManager

Producer

Consumer

Interest Groups Government

Ms Marshall 4

Section 1 Role of Stakeholders

bull Entrepreneurbull Spots an opportunity and

takes the initiative to set up a business in order to make a profit

bull They are risk takersbull Financial amp Personal Riskbull Eg Tony Ryan set up

Ryanairbull Bill Gates set up Microsoftbull Gillian Bowler set up Budget

Travel

bull Investorbull Investors provide the finance for the

business (shareholdersbanksstate bodies) and expect a return on their investment

bull Equity Capital ndash Shareholders- Dividends

bull Debt Capital ndash Banks-Interestbull Eg Ulster Bank loaned money to

Gillian Bowlerbull Enterprise Ireland gives grants to

entrepreneurs setting upbull The Body Shop sold a half share in

the business for euro7500

Ms Marshall 5

Role of Stakeholdersbull Employerbull The business itself is the employer It

hires employees to work for them and pay them according to their contract

bull Employers rights includebull Recruiting and selecting the

employeesbull Directing the employeesbull Dismissing unsatisfactory employeesbull Employerrsquos responsibilities includebull Providing a contractbull Payment of wagesbull Providing safe working conditionsbull Obeying employer law

bull Employeebull An employee is a person who works

for an employer in return for a wage bull Employeesrsquo Rightsbull Receiving a written contract of

employmentbull Being paid the agreed wagebull Working in a safe and healthy

workplacebull Freedom to join a trade unionbull Employeesrsquo Responsibilitiesbull Following instructionsbull Doing a fair dayrsquos work for a fair dayrsquos

paybull Being honest and loyal in their work

Ms Marshall 6

Role of Stakeholdersbull Managerbull The manager is responsible

for running the business and making sure that it achieves its objective

bull Must have the skills of leading motivating and communicating

bull Must engage in the activities of planning organising and controlling

bull Michael OrsquoLeary of Ryanair

bull Producers bull Producers are

manufacturers who take raw materials and turn them into a finished product to sell on

bull Eg Coca-Cola Cadburys Tayto Butlers

bull They use the factors of production to make a product land labour capital and enterprise

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 3

Stakeholders- people affected by how a business is

run

Entrepreneur

Investor

Employer

Service Provider

EmployeeManager

Producer

Consumer

Interest Groups Government

Ms Marshall 4

Section 1 Role of Stakeholders

bull Entrepreneurbull Spots an opportunity and

takes the initiative to set up a business in order to make a profit

bull They are risk takersbull Financial amp Personal Riskbull Eg Tony Ryan set up

Ryanairbull Bill Gates set up Microsoftbull Gillian Bowler set up Budget

Travel

bull Investorbull Investors provide the finance for the

business (shareholdersbanksstate bodies) and expect a return on their investment

bull Equity Capital ndash Shareholders- Dividends

bull Debt Capital ndash Banks-Interestbull Eg Ulster Bank loaned money to

Gillian Bowlerbull Enterprise Ireland gives grants to

entrepreneurs setting upbull The Body Shop sold a half share in

the business for euro7500

Ms Marshall 5

Role of Stakeholdersbull Employerbull The business itself is the employer It

hires employees to work for them and pay them according to their contract

bull Employers rights includebull Recruiting and selecting the

employeesbull Directing the employeesbull Dismissing unsatisfactory employeesbull Employerrsquos responsibilities includebull Providing a contractbull Payment of wagesbull Providing safe working conditionsbull Obeying employer law

bull Employeebull An employee is a person who works

for an employer in return for a wage bull Employeesrsquo Rightsbull Receiving a written contract of

employmentbull Being paid the agreed wagebull Working in a safe and healthy

workplacebull Freedom to join a trade unionbull Employeesrsquo Responsibilitiesbull Following instructionsbull Doing a fair dayrsquos work for a fair dayrsquos

paybull Being honest and loyal in their work

Ms Marshall 6

Role of Stakeholdersbull Managerbull The manager is responsible

for running the business and making sure that it achieves its objective

bull Must have the skills of leading motivating and communicating

bull Must engage in the activities of planning organising and controlling

bull Michael OrsquoLeary of Ryanair

bull Producers bull Producers are

manufacturers who take raw materials and turn them into a finished product to sell on

bull Eg Coca-Cola Cadburys Tayto Butlers

bull They use the factors of production to make a product land labour capital and enterprise

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 4

Section 1 Role of Stakeholders

bull Entrepreneurbull Spots an opportunity and

takes the initiative to set up a business in order to make a profit

bull They are risk takersbull Financial amp Personal Riskbull Eg Tony Ryan set up

Ryanairbull Bill Gates set up Microsoftbull Gillian Bowler set up Budget

Travel

bull Investorbull Investors provide the finance for the

business (shareholdersbanksstate bodies) and expect a return on their investment

bull Equity Capital ndash Shareholders- Dividends

bull Debt Capital ndash Banks-Interestbull Eg Ulster Bank loaned money to

Gillian Bowlerbull Enterprise Ireland gives grants to

entrepreneurs setting upbull The Body Shop sold a half share in

the business for euro7500

Ms Marshall 5

Role of Stakeholdersbull Employerbull The business itself is the employer It

hires employees to work for them and pay them according to their contract

bull Employers rights includebull Recruiting and selecting the

employeesbull Directing the employeesbull Dismissing unsatisfactory employeesbull Employerrsquos responsibilities includebull Providing a contractbull Payment of wagesbull Providing safe working conditionsbull Obeying employer law

bull Employeebull An employee is a person who works

for an employer in return for a wage bull Employeesrsquo Rightsbull Receiving a written contract of

employmentbull Being paid the agreed wagebull Working in a safe and healthy

workplacebull Freedom to join a trade unionbull Employeesrsquo Responsibilitiesbull Following instructionsbull Doing a fair dayrsquos work for a fair dayrsquos

paybull Being honest and loyal in their work

Ms Marshall 6

Role of Stakeholdersbull Managerbull The manager is responsible

for running the business and making sure that it achieves its objective

bull Must have the skills of leading motivating and communicating

bull Must engage in the activities of planning organising and controlling

bull Michael OrsquoLeary of Ryanair

bull Producers bull Producers are

manufacturers who take raw materials and turn them into a finished product to sell on

bull Eg Coca-Cola Cadburys Tayto Butlers

bull They use the factors of production to make a product land labour capital and enterprise

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 5

Role of Stakeholdersbull Employerbull The business itself is the employer It

hires employees to work for them and pay them according to their contract

bull Employers rights includebull Recruiting and selecting the

employeesbull Directing the employeesbull Dismissing unsatisfactory employeesbull Employerrsquos responsibilities includebull Providing a contractbull Payment of wagesbull Providing safe working conditionsbull Obeying employer law

bull Employeebull An employee is a person who works

for an employer in return for a wage bull Employeesrsquo Rightsbull Receiving a written contract of

employmentbull Being paid the agreed wagebull Working in a safe and healthy

workplacebull Freedom to join a trade unionbull Employeesrsquo Responsibilitiesbull Following instructionsbull Doing a fair dayrsquos work for a fair dayrsquos

paybull Being honest and loyal in their work

Ms Marshall 6

Role of Stakeholdersbull Managerbull The manager is responsible

for running the business and making sure that it achieves its objective

bull Must have the skills of leading motivating and communicating

bull Must engage in the activities of planning organising and controlling

bull Michael OrsquoLeary of Ryanair

bull Producers bull Producers are

manufacturers who take raw materials and turn them into a finished product to sell on

bull Eg Coca-Cola Cadburys Tayto Butlers

bull They use the factors of production to make a product land labour capital and enterprise

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 6

Role of Stakeholdersbull Managerbull The manager is responsible

for running the business and making sure that it achieves its objective

bull Must have the skills of leading motivating and communicating

bull Must engage in the activities of planning organising and controlling

bull Michael OrsquoLeary of Ryanair

bull Producers bull Producers are

manufacturers who take raw materials and turn them into a finished product to sell on

bull Eg Coca-Cola Cadburys Tayto Butlers

bull They use the factors of production to make a product land labour capital and enterprise

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 7

Role of Stakeholders

bull Consumerbull A consumer is a person

who buys goods or services from the entrepreneur for his own personal use

bull Provide the entrepreneur with a market and with market research

bull Service Providerbull Provide a range of

valuable supportsservices to a business

bull Eg Banks solicitors telephone companies couriers

bull Vital for efficiency

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 8

Role of Stakeholdersbull Interest Groupsbull An interest group is an

organisation which represents the common viewpoints objectives and goals of a particular group eg IBEC and ICTU would have negotiated with the Government in National Wage Agreements during the Celtic Tiger

bull They seek to influence decisions and policies affecting its members through various activities including negotiation lobbying boycotting and possibly legal action

bull Eg IBEC (Irish Business and Employers Confederation) is the main organisation representing large and medium-sized businesses in Ireland It attempts to influence trade unions the Irish government the EU and wider society on issues such as legislation taxation and pay amp conditions

bull Other interest groups ISME Greenpeace

bull Greenpeace organised a boycott of Shell Oil when they attempted to dump an old oil rig in the sea

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 9

Role of Stakeholders

bull Governmentbull Refers to local and

national authorities that set the rules and regulations by which businesses must operate

bull Changes in laws or taxes can affect how a business is run and what profits are earned

bull The government wants businesses to

Provide Jobs Pay their fair share of

taxes Obey the law

In return the government provides services such as schools hospitals roads and policing needed by business and society

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 10

Recent Exam Questionsbull Stakeholdersbull HL 20092003 (10 marks)bull Outline using an example the role of interest groups in business bull HL 2007 (10 marks) OL 2007bull Explain the term lsquoproducerrsquo and give two examplesbull HL 2002 (10 marks) bull Outline the role of any two parties involved in businessbull OL 20092003 (Section 1 10 marks)bull Explain the term investor and give two examples of investors bull 1999 (Section 1 10 marks each) bull List the main parties involved in business bull Explain the role of the entrepreneur in business

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 11

Section Two Relationships between Stakeholders

bull Common Questionsbull Discuss the relationship that would typically

exist between bull Entrepreneur ndash Investorbull Producer ndash Consumerbull Competitors Producersbull Employer - Employee

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 12

Relationships between Stakeholders

bull To answer this type of question we need to follow the following steps

bull 1) State the type of relationship that existsbull 2) Quick introduction to the stakeholdersbull 3) Define the type of relationshipbull 4) Expand your answerbull 5) Illustrate your answer with an example

relevant to the stakeholders in question

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 13

Relationships between Stakeholders

Relationships

CooperativeDynamic

Dependent Competitive

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 14

Relationships between Stakeholders

Examples from recent examsDescribe the relationship which exists between an employer and employee (15 marks)bull Employers hire other people to perform specific duties Employees are hired to carry out

certain duties in return for a wage eg Dept of Education is an employer teachers are their employees

bull Cooperative Relationship this means that the parties in business work together to achieve their goals It is a win-win relationship For example employees agreeing to take a pay cut during the recession to help the company reduce costs The employee keeps their job the employer reduces expenses

Cooperative Relationship this is where both parties work together to achieve their goal It is a win-win situation Working together produces

better results than working alone

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 15

Relationships between Stakeholders

Competitive Relationship this is a win-lose situation where one party wants to be more successful than the other They are rivals

Competitive This means that one party wants to be more successful than the other It is a win lose situation eg The employees want job security but the employer wants to make redundancies

Dependent Relationship This means that the parties in business need each other to be successful eg The employer needs the workers to do the jobs he is not able to do The employee needs their boss to provide wages

Dependent Relationship the two parties rely on each other for success They need each other

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 16

Relationships between stakeholdersbull Describe important aspects of the relationship between producers and consumers in business (15 marks) bull Approach define the two terms Describe the relationships under 3 headings to be safe as it is worth 15 marks Some

years they might have allocated 8m and 7m bull Answer Producers turn raw materials into finished products by combining the four factors of production ie Land labour

capital and enterprise eg Tayto turn potatoes into crispsbull Consumers buy products for their own personal use and do not sell them on eg Buying a packet of Tayto crisps and

eating them bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together

produces better results than working alone When consumers take the time to fill out questionnaires or take part in focus groups they provide market research for the producer This results in products that a consumer actually wants and the ability to make a profit for the producer

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg

A producer in a monopoly situation can charge a higher price to consumers without improving quality eg The ESB are increasing prices by 5

bull Dependent the two parties rely on each other for success eg The producer needs customers in order to make a profit

and continue in business in the pharmaceutical business industry profits may be reinvested into further research and development of drugs The consumer needs producers to provide them with essential products such as medicine

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 17

Relationships between stakeholders

bull 2008bull Competitive and Co-operative relationship between producers in the same business (describe with

examples) bull (A) Competitive Relationship bull A competitive relationship between two producers in the same line of business means each is pursuing

different objectives in an effort to achieve particular objectives at the expense of each other This is a win lose situation This is beneficial for the consumer as every business must work harder to satisfy consumer needs

bull Examples bull Producers in the same line of business may compete on prices of goods and services quality sales the

recruitment of labour etc bull Co-operative Relationship bull A co-operative relationship exists where joint action or effort is required so that producers work together

to everyonersquos benefittowards a common goalact in a mutually beneficial manner This is a win win situation

bull Examples bull Producers in the same line of business sometimes get together and co-operate with each other to protect

their specific industry against an outside threatto encourage economic development and to create jobs for the benefit of the community two producers may get together to lobby government to solve problems of mutual interest

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 18

Relationships between stakeholders

bull 2009bull Discuss how consumers may benefit from the existence of a competitive relationshipbull between producersbull A competitive relationship between producers in the same line of business means each isbull pursuing different objectives in an effort to achieve particular objectives at the expense of thebull other (win-lose relationship) This is beneficial for the consumer as every business must workbull hard to satisfy customer needsbull Examplesbull Producers in the same line of business may compete on prices of goods and servicesbull quality sales recruitment of labour etcbull Customer will benefit frombull 1048696 Improved qualitybull 1048696 Improved customer Servicebull 1048696 Better choice of productsbull 1048696 Better value for money

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 19

Relationships between stakeholders

bull The CEO of Mecca Enterprises a national firm in the leisure business believes that good relationships which help in resolving situations of conflict between business organisations are most important At present however she feels that there is a very high risk of ongoing conflict in the future (20 marks)

bull Describe a cooperative and a competitive relationship that would typically exist between Mecca and other business organisations

bull Approach decide on business organisations they would be dealing with eg Competitors You could choose two different organisations or just one Define cooperative and competitive relationships and give examples relevant to the text

bull Cooperative this is where both parties work together to achieve their goal It is a win-win situation Working together produces better results than working alone For example Mecca may provide certain leisure facilities but maybe not all eg They may have a beauty salon but not a hairdressers They could enter into a strategic alliance or joint venture with the local hairdressers eg Half price manicure with highlights

bull Competitive this is a win-lose situation where one party wants to be more successful than the other They are rivals eg Mecca Enterprises could compete with other National Leisure businesses eg Salons gyms on the basis of price They could increase advertising to increase awareness amongst consumers or to directly compare themselves with their competitors which can be seen in the leisure industry already with Jackie Skelly and Ben Dunne

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 20

Class workbull 2011bull (A) Outline using examples the relationship that can exist between

lsquoInvestorsrsquo and bull lsquoEntrepreneursrsquo in business (15 marks) bull 2012 Mocks bull Describe a cooperative and a competitive relationship that could exist

between two competing businesses in the transport industry Support your answer with examples (15 marks)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 21

Dynamicbull Some relationships could also

be called dynamic This is a situation where the relationship is changing Eg Peoplersquos roles in a business can change An employee might be promoted to manager changing his relationship with his work colleagues and management He could buy shares if the company becomes a PLC making him an investor Eg Facebook employees

bull ldquoNow after a blockbuster $5billion Facebook stock exchange flotation moved a step closer today at least 1000 employees of the social network based in Menlo Park California are finally on their way to becoming millionaires

bull Facebook today submitted paperwork to regulators for the most anticipated initial public offering since Google in 2004 expected to value the hugely-successful company at up to $100billionrdquo

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 22

Contract Law

bull There are eight elements which must exist in order for a contract to be deemed legally binding

Contract a legally binding agreement between two or more parties that is enforceable by law Eg an employment contract given to an employee by an employer

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 23

Contract Law

8 Elements of a Valid Contract

1 Offer

2 Acceptance

8 Legality of Purpose

3 Consideratio

n4 Intention5 Consent

6 Capacity

7 Legality of Form

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 24

Contract Law

bull Offer One party ask another party to enter into a deal with clear terms It is a promise to by bound by the contract if offer is accepted

bull Offers may be made verbally in writing or by conduct

bull Terminated ifbull withdrawn before

acceptancebull Not accepted in timebull Rejected by other partyNote Invitation to Treat price

tags are an invitation to pay a certain price for an item They are not a legal offer the seller can still refuse to sell the item to you for that price

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 25

Contract law

bull Acceptance Other party agrees to accept all terms of the offer without any conditions

bull Any change in terms would be a counter offer

bull Acceptance can be verbal in writing or by conduct

bull Consideration this is what each party offers the other as evidence of their agreement Both parties must receive something real and valuable quid pro quo Eg one party gets the product the other the money

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 26

Contract Lawbull Intention to contractbull This means that both parties

must mean the agreement to be a legally binding contract

bull Irish law makes two assumptions

bull 1 Agreements between business people are always contracts

bull 2 All social agreement are not intended to be legally binding Non-business transactions between family members are included in this

bull Consent to Contractbull Each party must enter

the contract of their own free will and cannot be forced

bull Consent may not exist ifbull There was physical or

mental intimidationbull There was deliberate

misrepresentation

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 27

Contract Lawbull Capacity to Contractbull This means that the people entering

the contract have the legal ability and power to do so

bull Those who do not have capacity to contract include

bull Under 18rsquosbull Those who are mentally

incapacitated because they are drunk on drugs or insane

bull Diplomats ndash they have diplomatic immunity

bull Company directors who act ultra vires

bull Bankrupt persons

bull Legality of Formbull This means that certain contracts

must be drawn up in writing before they can become legally binding Eg when buying a house entering a hire purchase agreement or taking out insurance policies

bull Legality of Purposebull Means that for a contract to be

legally binding it must be for a legal purpose and not involve committing any crime or breaking the law Eg if someone refuses to pay you for illegal drugs you cannot bring them to court

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 28

Definitions relating to contract lawbull Ultra Vires this is when a company director acts

outside their authority by authorising actions not covered in the Memorandum of Association

bull Condition an essential part of the contract if it is broken the contract is breached Eg a singer fails to turn up to a concert

bull Warranty an element of a contract if it is broken the contract is not cancelled but the injured party can claim for damages in court Eg a builder finishing a project late

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 29

Termination of a Contract

bull Performance both sides to a contract carry out their duties as agreed Eg John hires Tom to build a wall Tom builds the wall and John pays him the agreed price

bull Agreement both parties agree to end the contract Eg John and Tom both agree to leave this contract

bull Frustration the contract ends due to an unforeseen event ie death of one party insanity or bankruptcy Eg Michael Jackson died just before his ldquoThis is itrdquo tour

bull Breach of Contract this is where one party breaks a condition in the contract Eg John does not pay Tom for the work completed

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 30

Remedies for Breach of Contractbull Damages the party who breached the contract is ordered by the judge

to pay financial compensation Eg a singer pulling out of a concert at the last minute may have to pay damages for the lost revenue of the event organisers

bull Specific Performance the court may order that the contract be carried out in accordance with the term of the agreed contract Eg the court orders that a singer who backed out of a concert at the last minute plays the concert at a later date

bull Rescind the Contract the contract is cancelled and the situation returns to what it was before Eg when Michael Jackson died any contracts such as his concert dates were terminated due to frustration The judge could not order compensation to these event organisers Instead they would return to the situation they were in before

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 31

Contract Law - Summary State Explain Expand Example

Offer Ask another person to enter into a deal with clear terms

Can be withdrawn at any stage before it is complete

Making an offer of euro280000 on a house

Acceptance Other party agrees to accept all terms of the offer

Any change in terms would be a counter offer

Acceptance= agreeing to the euro280000 offer Counter offer = wanting euro285000

Consideration Financial value Ie payment

Quid pro quo = both parties get something out of it

The euro280000 for one party the house for the other

Intention Both parties understand it is a legally binding contract

Family non business agreements-not binding

A promise to look after your parents in their old age - not binding

At HL Offer amp Acceptance

are accepted only as one

element ldquoAgreementrdquo

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 32

Contract Law - SummaryState Explain Expand Example

Capacity Legal ability to make contract

Over 18 Not incapacitated or a diplomat

eg A director acting outside his authority -not binding Ultra Vires

Consent Cannot be forced own free will

Real permission given know what they are getting into

Not binding if you signed a contract with a gun to your head

Legality of Form Drawn up in a certain way

Some contracts must be written

Contract for selling a house HP insurance

Legality of Purpose

Contract law only applies to legal transactions

A drug deal is not legally binding

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 33

Recent Exam Questionsbull Contract Lawbull 2012bull A legal contract can be terminated by breach frustration or agreement Illustrate your understanding of the

underlined terms (hl 20 marks) bull OLbull (A) Joe and Michael entered into a contract What is a contract (10 marks) bull (B) Offer Acceptance Consideration and Consent to Contract are elements of a valid contract bull Explain any three of these elements Illustrate your answer with reference to the above text bull (25 marks) bull (C) A contract can be terminated (ended) by Performance or Frustration bull Explain the underlined terms (15 marks) bull 2009 2007 Higher Level (10 marks)bull Explain the term lsquoconsiderationrsquo Outline two other elements of a legally binding contractbull 2009 Ordinary Level (30 marks 152)bull James has decided to sell his car privately He advertised in a local newspaper Tom rang James and after

much discussion he said he would drop by the following day to buy the car Tom did not however come to buy the car

bull (I) State and explain two elements of a valid contractbull (ii) Do James and Tom have a contract Explain your answer

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)

Ms Marshall 34

Recent Exam Questionsbull 2008 HL (10 marks)bull In relation to the law of contract distinguish between the terms lsquoofferrsquo and

lsquoinvitation to treatrsquobull 2008 Ordinary Level (10 marks)bull List three elements of a valid contractbull 2006 HLbull Explain the elements of a valid contract(20 marks) (give 5 points)bull 2005 HL (10 marks)bull Explain four methods by which a legal contract may be terminated (20 marks)bull 2005 HL (10 marks)bull Explain the legal term lsquocapacity to contractrsquo Give two examples of situations

where an individual or legal entity does not have capacity to contractbull 2001 HL (20 marks)bull Define Contract Outline why an invitation to treat in not a contract

• Chapter One
• Slide 2
• Slide 3
• Section 1 Role of Stakeholders
• Role of Stakeholders
• Role of Stakeholders (2)
• Role of Stakeholders (3)
• Role of Stakeholders (4)
• Role of Stakeholders (5)
• Recent Exam Questions
• Section Two Relationships between Stakeholders
• Relationships between Stakeholders
• Relationships between Stakeholders (2)
• Relationships between Stakeholders (3)
• Relationships between Stakeholders (4)
• Relationships between stakeholders
• Relationships between stakeholders (2)
• Relationships between stakeholders (3)
• Relationships between stakeholders (4)
• Class work
• Dynamic
• Contract Law
• Contract Law (2)
• Contract Law (3)
• Contract law
• Contract Law (4)
• Contract Law (5)
• Definitions relating to contract law
• Termination of a Contract
• Remedies for Breach of Contract
• Contract Law - Summary
• Contract Law - Summary (2)
• Recent Exam Questions (2)
• Recent Exam Questions (3)