ERIC ED373207: Legal Issues. Unit 12. Level 1. Instructor Guide. PACE: Program for Acquiring Competence in Entrepreneurship. Third Edition. Research & Development Series No. 301-12.

21 Pages·1994·0.46 MB·English

by  ERIC

DOCUMENT RESUME
CE 067 041
ED 373 207
Legal Issues. Unit 12. Level 1. Instructor Guide.
TITLE
PACE: Program for Acquiring Competence in
Entrepreneurship. Third Edition. Research &
Developr.'ent Series No. 301-12.
Ohio State Univ., Columbus. Center on Education and
INSTITUTION
Training for Employment.
PUB DATE
94
21p.; For the complete set, i.e., 21 units, each done
NOTE
at three levels, see CE 067 029-092. Supported by the
International Consortium for Entrepreneurship
Education, the Coleman Foundation, and the Center for
Entrepreneurial Leadership Inc.
Center on Education and Training for Employment, 1900
AVAILABLE FROM
Kenny Road, Columbus, OH b3210-1090 (order no.
RD301-12, IG, instructor guide $4.50; RD3012M,
student module, $3; student module sets, level
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Teaching Guides (For
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Behavioral Objectives; *Business Education;
DESCRIPTORS
*Competency Based Education; Compliance (Legal);
*Contracts; Copyrights; *Entrepreneurship; Learning
Activities; Legal Problems; *Legal Responsibility;
Ownership; Patents; Postsecondary Education;
Secondary Education; *Small Businesses; Student
Evaluation; Teaching Guides
*Program for Acquiring Competence Entrepreneurship
IDENTIFIERS
ABSTRACT
This instructor guide for a unit on legal issues in
the PACE (Program for Acquiring Competence in Entrepreneurship)
curriculum includes the full text of the student module and lesson
plans, instructional suggestions, and other teacher resources. The
of
competencies that are incorporated into this module are at Level
1
learning--understanding the creation and operation of a business.
Included in the instructor's guide are the following: unit
objectives, guidelines for using PACE, lists of teaching suggestions
for each unit objective/subobjective, model assessment responses, and
overview of the three levels of the PACE program. The following
materials are contained in the student's guide: activities to be
completed in preparation for the unit, unit objectives, student
reading materials, individual and group learning activities, case
study, discussion questions, assessment questions, and references.
Among the topics discussed in the unit are the following: ways laws
affect the operation of small businesses; the importance of legal
issues and learning about the law; contracts and their importance;
agreements; the concepts of consideration, capacity, legality, and
mutuality of consent; and ways business ideas can be protected.
(MN)
INSTRUCTOR GUIDE
UNIT 12
LEVEL 1
Unit 12
O
Legal Issues
csi
ce)
N
Level 1
c)
0
HOW TO USE PACE
Use the objectives as a pretest. If a student
is able to meet the objectives, ask him or
her to read and respond to the assessment
questions in the back of the module.
Program for Acquiring
Competence in
Entrepreneurship
Duplicate the glossary from the Resource
THIRD EDITION
Guide to use as a handout.
t.1pruent ....no, 5., Vi 12
III
11,4,11t h
Use the teaching outlines provided in the
Instructor Guide for ascktance in focusing
The left side of
your teaching delivery
Objectives:
each outline page lists objectives with the
corresponding headings (margin questions)
from the unit. Space is provided for you to
Define how laws affect the small business operation.
add your own suggestions. Try to increase
student involvement in as many ways as
possibly to foster an interactive learning
Discuss the importance of government rules and regu-
process.
lations.
When your students are ready to do the
Define the term "contracts".
Activities, assist them in selecting those
that you feel would be the most beneficial
Identify the components of a contract.
to their growth in entrepreneurship.
Discuss the importance of a contract.
Assess your students on the unit content
when they indicate they are ready.
You
may choose written or verbal assessments
Define patents, copyrights, and trademarks.
Model re-
according to the situation.
sponses are provided for each module of
S DEPARTMENT Or F nuCATIoN
"PERMISSION TO REPRODUCE THIS
E UCATIONAL RESOURCES INFORMATION
While these are suggested
each
unit.
MATERIAL HAS BEEN GRANTED BY
CENTER f ERIC1
This document has been recodrea as
responses, others may be equally valid.
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BEST COPY AVAILABLE
offic.al GERI
INFORMATION CENTER (ERICi
Objectives
Teaching Suggestions
1. DEFINE HOW LAWS AFFECT
THE SMALL BUSINESS
OPERATION
How do laws affect the operation
On a chalkboard or overhead, list and discuss the major laws
of a small business?
affecting small business.
2. DISCUSS THE IMPORTANCE
OF GOVERNMENT RULES
AND REGULATIONS
Why are legal issues important?
Break into small groups, have each group discuss the concept of
business ethics as it relates to the laws governing small business.
Reconvene the class and facilitate a group discussion using ideas
generated in the small groups.
3. DEFINE THE TERM
"CONTRACT" AND DISCUSS
ITS IMPORTANCE
What is a contract?
Have the class offer ideas relating to how their lives are affected
by different types of contracts.
4. IDENTIFY THE COMPONENTS
OF A CONTRACT
What makes a contract legally en-
Discuss the five essential components of a contract. The discus-
forceable?
sion should address each separately and how they relate to each
other to form the makeup of a legally enforceable contract.
What is an agreement?
What is consideration?
What is capacity?
What is legality?
What is mutuality of consent?
Teaching Suggestions
Objectives
5. DEFINE PATENTS,
COPYRIGHTS, AND
TRADEMARKS
How can business ideas be pro-
Task the class with gathering samples from the popular media
tected?
(i.e., newspaper, magazines, general advertisements) of trade-
marks and/or service marks.
Discuss with the class the ramifications of being unaware of the
Why learn about the law?
Highlight the
laws and regulations that affect small business.
fact that it does not pay to take shortcuts when it comes business
laws. The risks are too great.
MODEL ASSESSMENT RESPONSES
Failure to obey rules and regulations can ruin a business. Contracts are guided by many rules and regula-
1.
tions and most business transactions involves a contract. Each creates a specific legal issue that must be
dealt with.
The operations of a small business cannot help but be affected by laws. Every aspect of small business
2.
from beginning to end is regulated by laws. This is why an entrepreneur must know where to go to get
legal advice when the need arises.
A contract is an arrangement regarding mutual responsibilities between two or more parties that is legally
3.
enforceable.
The five essential elements of a contract are: (1) Agreement is the foundation of a contract. An agreement
4.
(2) Con-
starts with an offer, followed by acceptance, and ending with a reasonable definite understanding.
(3) Capacity
sideration describes the exchange of something valuable between the parties to a contract.
(4) Legality (or legal purpose)
is the ability to clearly understand the terms and scope of the contract.
Courts will not enforce an illegal
refers to the stipulation that all aspects of the 'contract must be legal.
(5) Mutuality of consent means that the parties to a contract know and understand the terms of
contract.
the contract and freely enter into it.
provides the exclusive rights to the inventor to make, use, or sell their invention. Patents may be
patent
A
5.
obtained on new products, industrial or technical processes, machines designs, or other items ;avolved in
the process of doing business.
protect printed material such as literary and artistic. Copyrights are effective for the life of the
Copyrights
author plus an additional fifty years.
is a word, na.ie, symbol, device (design), or a combination of these items that are used to
trademark
A
identify a product.
Program for Acquiring
y
Competence in
406
Entrepreneurship
-AP:,
W'e
experiences and
Incorporates the needed competencies for creating and operating a small business at three levels of learning, with
outcomes becoming progressively more advanced.
Understanding the creation and operation of a business.
Level I
Planning for a business in your future.
Level 2
Starting and managing your own business.
Level 3
in form of answers
Self-contained Student Modules include: specific objectives, questions supporting the objectives. complete content
references. Instructor Guides include the full text
to the questions, case studies, individual activities, group activities, module assessment
PACE,Third Edition, Resource Guide includes
of each student module and lesson plans. instructional suggestions. and other resources.
assistance organizations.
teaching strategies, references, glossary of terms, and a directory of entrepreneurship
For information on PACE or to order, contact the Publications Department at the
Columbus, Ohio 43210-1090
Center on Education and Training for Employment, 1900 Kenny Road,
[phone], [phone].
Support for PACE, Third Edition provided in whole or in part by:
The Coleman Foundation
International Consortium for Entrepreneurship Education
and
Center for Entrepi eneurial Leadership Inc.
International
Enterprise Academy
Ewing Marion Kauffman Foundation
Center on Education and Training for Employment
The Ohio State University
UNIT 12
LEVEL 1
Legal
Issues
Your Potential
Nature of
The
Business
Global Markets
as an
Small Business
Business Plan
Opportunities
Entrepreneur
Help for
Types of
Pricing
Marketing
Financing
Location
the
Strategy
Analysis
the Business
Ownership
Entrepreneur
Human
Business
Promotion
Selling
Resources
Management
Risk
Customer
Financial
Record
Operations
Management
Credit
Analysis
Keeping
Program for Acquiring
Competence in
ilk
Entrepreneurship
I
II
CENTER ON EDUCATION
AND TRAINING FOR EMPLOYMENT
13
COLLEGE OF EDUCATION
Research & Development Series No. 301-12
THE OHIO STATE UNIVERSITY
LEGAL ISSUES
.. .
BEFORE YOU BEGIN
if this is your first PACE unit.
Consult the Resource Guide for instructions
1.
If you think
on the following page.
Read What are the Objectives for this Unit
2.
your instructor.
you can meet these objectives now, consult
If you need help with the
this unit.
Look for these business terms as you read
3.
the PACE Glossary contained in the
meanings, ask your instructor for a copy of
Resource Guide.
Legally enforceable
Agreement
Misrepresentation
Consideration
Mutuality of consent
Contract
Party to a contract
Contractual capacity
Patent
Copyright
Reasonable definite understanding
Duress
Service mark
Equal opportunity/Anti discrimination
Trademark
laws
Usury
Fraud
Lawsuit
Copyright
1994. Center on Education and Training for Employment.
al)
The Ohio State University. All rights reserved.
3
LEGAL ISSUES
WHAT ARE THE OBJECTIVES FOR THIS UNIT?
Upon completion of this unit you will be able to
discuss how laws affect the small business operation,
discuss the importance of government rules and regulations,
define the term "contract" and discuss its importance,
identify the components of a contract, and
define patents, copyrights, and trademarks.
a contract? Why are contracts important?
WHAT IS THIS UNIT ABOUT?
What are patents, copyrights, and trade-
:narks?
There
are many laws and regulations that
Completing this unit will familiarize you
affect the way business is done. Small busi-
with the basic legal issues facing the small
ness owners must understand a variety of
You will not become a
business owner.
legal issues in order to avoid breaking the
legal expert, but you will know when you
law. Small business owners who break the
should get professional help with problems
law may face lawsuits from those they injure
involving legal issues.
and in some cases fines or jail time.
Two other PACE units deal with legal
This unit is designed to help you understand
issues. They are titled Types of Ownership
the legal issues that small business owners
and Help for the Entrepreneur. These units,
When you have completed this unit
face.
along with this one, prepare you to under-
you will be able to answer the following
stand and deal with the legal issues faced by
questions: Why are government rules and
small business owners.
regulations important? How do laws affect
the way small businesses operate? What is
4
After the business is started the entrepreneur
HOW DO LAWS AFFECT
will continue to face legal issues almost
THE OPERATION OF A
daily. Contracts are made with suppliers and
SMALL BUSINESS?
Taxes are collected and paid.
customers.
People may be injured by activities of the
Employees are hired and fired.
business.
Much of an entrepreneur's time is spent
All
Property is either bought or leased.
dealing with legal issues. When the business
these areas and more are governed by laws
is first started the entrepreneur must get the
and regulations.
required licenses, file for ownership paper-
work if the entrepreneur chooses to form a
Laws even affect entrepreneurs when they
partnership or corporation, and comply with
Agreements
decide to go out of business.
securities laws if the entrepreneur sells stock
with suppliers, customers and landlords may
or partnership interests in the business. Each
be broken. Taxes may be owed. Employees
of these areas is regulated by laws.
may be owed wages. All of these areas are
potential sources of legal problems.
Small businesses are affected by many laws.
It is not necessary for the small business
Some of the laws affecting businesses are as
of busi-
owner to be an expert in all areas
follows:
is important that
However, it
ness law.
entrepreneurs recognize situations that create
Contract laws
When entrepre-
potential legal problems.
neurs identify a situation that presents a
Tax laws
legal issue, they should seek advice from a
qualified attorney.
Worker safety laws
WHY ARE LEGAL
Lending and credit regulations
ISSUES IMPORTANT?
Sales laws
Laws and regulations make business easier
Labor laws
Business transactions are more pre-
to do.
For example, without
dictable and safer.
banking laws it would be impossible for cus-
Real estate laws
tomers to pay for goods and services with
Laws and govern-
checks or credit cards.
License laws
ment regulations make the banking system
work. This allows people to use bank ser-
vices such as checking accounts and credit
Consumer protection laws
cards.
Equal opportunity (anti-discrimination)
laws
5
WHY LEARN ABOUT
Tax laws are needed to raise money for gov-
These services include
ernment services.
THE LAW?
building roads, establishing telephone and
television regulations, providing police and
fire protection, and building schools, just to
very complex. Most entrepre-
The law is
name a few. Without these important gov-
neurs will have to hire an attorney to get
ernment services it would be almost impos-
advice on how the law affects their business.
sible to do business.
So why learn about the law?
Business owners, employees, and consumers
is important for every entrepreneur to
It
Antitrust
also benefit from various laws.
Therefore, many of
learn about the law.
laws prevent big companies from driving
their business activities involve the law.
Workers
small businesses out of business.
Things such as hiring employees, paying
rules and
benefit from workplace safety
taxes, and using' contracts to buy and sell
Consumers are pro-
minimum wage laws.
goods and services directly involve laws or
tected against false advertising and defective
business person
An active
regulations.
As you can see from the above
products.
encounters hundreds of legal situations a
examples, laws and regulations are an irnoor-
day.
tant part of the business system.
Every
the benefit of the
business person gets
Knowing about the law helps in two ways.
system. Everyone must also obey the laws
business person
to
allows
Firstly,
a
it
Everyone must
so the system will work.
law.
the
involve
that
issues
identify
learn and understand the laws that affect
Knowing that an issue may involve special
them so that they can obey the law.
legal concerns helps an entrepreneur know
seek advice from an attorney,
when to
Failure to obey the law can ruin a business.
accountant or other source of assistance.
Breaking the law usually results in produc-
ing unnappy customers, suppliers, and em-
helps them deal with
their
Secondly,
it
ployees. Many times those who have been
If
attorney or accountant more effectively.
harmed will start lawsuits against the entre-
a legal issue is minor, they may be able to
In some cases
preneur who broke the law.
If it is a more
handle it without much help.
there may be a criminal penalty for not fol-
complex issue they will know what questions
In these cases,
lowing a law or regulation.
to ask when they seek assistance. This helps
violating the law could land the business
them get better advice.
owner in jail or he or she could be fined.
It
is good business to know the law and obey
it.
WHAT IS A CONTRACT?
In day-to-day business operations, entrepre-
neurs must deal with a variety of activities
A contract is an agreement between two or
that involve business law. Contracts, which
more people that is legally enforceable. The
are made in most business transactions,
people making a contract are called parties.
the entrepreneur
issues
to
legal
present
Each party to a contract must do something.
everyday.
A_0