Business CHAP 1 UNIT 1

• Co-operative relationship


  Stakeholders work together towards a common goal
• Co-operative relationship


  • It is a win-win relationship
• COMPETITIVE RELATIONSHIP :

  EXISTS WHEN ONE STAKEHOLDER BENEFITS AT THE OTHER PARTYS EXPENSE. IT IS A WIN-LOSE RELATIONSHIP
• BENEFITS OF STAKEHOLDERS OF COMPETITIVE RELATIONSHIPS

  1. Decrease price
  2. Increase the range of products available
  3. Offer better customer service
  4. Improve the quality of its products
• CONTRACT

  A formal agreement between two or more people that is enforceable by law.
• ELEMENT OF A LEGAL AGREEMENT

  1. Agreement: Offer & Acceptance
  2. Consideration
  3. Legality of form
  4. Consent to contract
  5. Capacity to contract
  6. Legality of purpose
  7. Intention to contract
• ELEMENT OF A LEGAL CONTRACT: Agreement

  For agreement to take place, there must be an offer and acceptance.

  
  

  OFFER: The offer can be made orally, in writing or by conduct and is a promise indicating willingness to enter into an agreement under specified terms
• Agreement- Element of a legal contract

  Acceptance: The person or party that has received the offer agrees to the specified terms without any changes to any conditions of the original offer.
• CONSIDERATION- Elements of a legal contract.

  • Something of value must pass between both parties to a contract for it to be legally valid.
  • Usually money is exchanged for some good or service, but anything of value agreed in exchange for another item is consideration.
• Legality of form- Element of a legal contract

  • Some contract must be drawn up in a certain manner in order to be legally valid.

  For example, certain contracts must be in written format.
• Consent to contract- Elements of a legal contract

  • Each party chooses to enter a contract voluntarily.
  • If either party was threatened or forced to enter a contract through intimidation, then it would not be valid if they can prove that there was intimidation.
  • Party cannot be forced to agree a contract through threats
• Capacity to contract- Elements of a legal contract

  • This is the legal ability and right to enter into a legal contract
• Legality of purpose- Element of a legal contract

  • To be valid, a contract must be for legal activities only.
• Intention to contract- Element of a legal contract

  • There must be awareness that the agreement is going to be a legally valid contract, and not just a social arrangement or non-legal agreement.
• HOW A LEGAL CONTRACT IS TERMINATED

  • Frustration: An unforeseen event occurs that makes the original terms of the contract impossible to complete by one of the parties. This could be due to their death or bankruptcy.
• HOW A LEGAL CONTRACT IS TERMINATED

  • Performance: When both parties fulfil what was agreed in the original terms of the contract, the contract has been executed and has now ceased.
• HOW A LEGAL CONTRACT IS TERMINATED

  • Agreement: If both parties in the contract decide they no longer want to carry on with the contract before it has concluded, they may agree to mutual consent to end the contract early.
• HOW A LEGAL CONTRACT IS TERMINATED

  • Breach: If one party breaks their contractual obligations (does not do what they are supposed to do) for a condition (an essential part of the contract), they are said to be in breach.
  • The other party could take legal action against them for compensation.
• CONDITION: This is an essential element of a contract that, if broken, could lead to a breach of contract.
• WARRANTY: This is a smaller element of the contract that is considered non-essential, and would not by itself lead to a breach of contract.