Leaving Cert Notes

Notes and Anki Decks for the Leaving Cert

List and explain the main stakeholders involved in business
Describe the different relationships that might exist between different stakeholders that are affected by a business
Analyse the relationships between stakeholders in a business
Outline the elements of contract law
Explain how a legal contract can be terminated
Show how breaches of a contract can be resolved in court

Name	Definition
Entrepreneur	“Spots gaps in the market, takes personal/financial risk to make a profit”
Investor	Gives capital to fund a business in exchange for a return on their investment
Employer	Hires employees to carry out work and pays them wages
Employee	Is paid a wage or salary to carry out work for their employer
Manager	Runs a business (or a department) for the entrepreneur
Producer	“Manufactures goods from raw materials, combining the factors of production”
Supplier	Sells goods (stock) or partly finished goods (raw materials) to a business
Service Provider	“Offers services to business (e.g. electricity, broadband, legal and banking)”
Consumer	Buys goods or services for their own personal use
Government	“Sets rules and laws, collects taxes, creates a suitable climate for businesses”
Interest Groups	Lobbies/negotiates decision-makers on behalf of a group with a common interest

Rely on each other
Requires help from each other
Stakeholders need each other to survive
Needs to have a minimum of 2 stakeholders
Typically, it is one stakeholder providing a service to another
Example: Carphone Warehouse were forced to close Irish branches when they lost provider contracts

Always moving/changing
Both Competitive and Co-operative
Constant chance to change
Pepsi given the chance at getting Coca-Cola’s recipe. Rang Coca-Cola and let them know it was offered
Example: Employees work together day to day but compete for promotion

A co-operative relationship exists when stakeholders work together towards a common goal. It is a win-win relationship

Examples:

Purchasing manager and supplier
Suppliers and producers
Employers and employees
Service providers and producers
Customers and producers
Government and interest groups (Try to avoid because these relationships fluctuate between co-operative and competitive/aggressive)

A purchasing manager may ask for their credit period to be extended when they experience cash flow problems

If the supplier increases the credit period, the supplier wins, as they are building customer loyalty for future sales
The purchasing manager also wins, as they have time to raise enough cash to pay off their debts and will not face penalties or bankruptcy

A competitive relationship exists when one stakeholder benefits at the other party’s expense. It is a win–lose relationship

e.g. investor and entrepreneur

An investor will want a high return on investment
If they negotiate for a higher return from the entrepreneur, the investor will receive a higher share of profits and higher dividends (will win) at the expense of the entrepreneur (will lose), who has to give away a higher percentage of their profits from the business

Name	Explanation
Producers	Compete to provide the best product to customers
Managers	Compete with other managers to reach targets
Suppliers	Compete to get contracts
Employers	Compete for promotion

Consumers can benefit from two producers who are competing on:

Agreement	Offer and acceptance must exist	Examples
Consideration	Something of value must be exchanged between parties	Builder builds the house. Homeowner pays builder
Legality of form	Some contracts must be in a certain format (e.g. written contract)	There is a specific contract format for worker’s contracts. This format wouldn’t suit buying a house
Consent to contract	Party cannot be forced to agree to a contract through threats	Can’t trap or trick someone into a contract by way of threats of misinformation
Capacity to contract	“Legal ability to agree: cannot be bankrupt, insane persons, ultra vires”	You can’t be off your head and sign a contract
Legality of purpose	Contracts for illegal activities (e.g. a drug deal) are not enforceable by law
Intention to contract	“Awareness that the agreement is legal, not just social or domestic”

Name	Definition
Frustration	An event occurs (e.g. death or bankruptcy) that makes the contract impossible
Performance	Both sides carry out contractual obligations
Agreement	Parties decide to end the contract early by mutual consent
Breach	One party breaks an essential element (condition)

Name	Definition
Specific Performance	A court orders the party who broke the contract to fulfil its agreed terms and carry out its contractual obligations
Financial Compensation	A judge offers damages in the form of money to the injured party
Rescind Contract	A court orders parties to return to their initial starting position