Competency - Based Learning Materials: Sector: Tourism Sector
Competency - Based Learning Materials: Sector: Tourism Sector
Competency - Based Learning Materials: Sector: Tourism Sector
MATERIALS
Sector: TOURISM SECTOR
You need to complete this module before you can perform the module
on PRACTICE OCCUPATIONAL HEALTH AND SAFETY
PROCEDURE.
BASIC COMPETENCY
LIST OF COMPETENCIES
PRACTICE
OCCUPATIONAL HEALTH Practicing occupational
4 500311108
AND SAFETY health and safety procedure
PROCEDURE
MODULE CONTENT
MODULE DESCRIPTOR:
Introduction
This unit of competency deals with the knowledge, skills and attitudes
in promoting career growth and advancement.
Learning Outcome
Assessment Criteria
1. Portfolio assessment
2. Interview
3. Simulation / role plays
4. Observationexams and test
LEARNING OUTCOME #1 INTEGRATE OBJECTIVES
WITH ORGANIZATIONAL
GOALS
CONTENTS:
1. Work values and ethics (code of conduct, code of ethics, etc.)
2. Company policies
3. Company-operations, procedures and standards
4. Fundamentals rights at workincluding gender sensitivity
5. Personal hygiene practices
ASSESSMENT CRITERIA
1. Personal growth and work plans are pursued towards improving the
qualifications set for the profession
2. Intra-and interpersonal relationships are maintained in the course of
managing oneself based on performance evaluation
3. Commitment to the organization and its goal is demonstrated in the
performance of duties
CONDITION
Student/ trainee must be provided with the following:
Trainings & career
Evaluation Resources
opportunities
Participations in
training programs
Technical
- Supervisory
Human
Performance - Managerial
Financial - Continuing
appraisal
Technology - Education
Psychological
Hardware
profile
Software Serving as reources
Aptitude test
persons in
conferences and
workshops
ASSESSMENT METHOD:
Direct observation
Oral interview and written test
Learning Experiences
Learning Outcome 1
INTEGRATED PERSONAL OBJECTIVES WITH ORGANIZATIONAL
GOALS
Introduction
It is essential in the hospitality, tourism and travel
industries to be able to establish, manage and sustain
business relationships.
These business relationships may be with a wide range
of people, organisations and/or bodies.
This Section identifies the range of business
relationships a business may need, or elect, to develop
and maintain, and describes the environment in which
such a relationship will need to occur for it to be effective.
Introduction
Establishing and conducting business relationships requires you build trust and
respect into these relationships.
This Section discusses the concepts of ‘trust’ and ‘respect’ identifying how it can be
created and maintained in business relationships
Trust
Trust refers to the ability of your customers (and other stakeholders – suppliers,
government authorities) to believe you and believe you will do what you will say you
will do, when you say you will do it.
Trust is a result of actions and not promises.
This means you must:
Be very careful about what you promise or say you will or
can do – never tell customers or potential customers what
they want to hear if you think/know the business cannot
deliver on that promise
Under-promise and over-deliver – if you tell a customer
they will receive an email within 24 hours send them one
within the hour; if you tell a customer they will save 5%,
make sure they receive a 6%+ savings
Read any contracts or agreements you sign – so you know the obligations the
business is under. For example, if your supplier requires payment within 30 days,
make sure they receive payment within this time.
Trust means your customers can rely on you to deliver what you have promised,
when you have promised it and at the price you said it would be provided at.
Building trust requires many things to occur but most of them are relatively simple to
achieve:
Follow-up on all things – as promised. For example:
Send quotations as and by the time promised
Send information as promised
Call in to see people as promised
Call back if you have promised to do so.
Honour promises made – even where this may cost
the business money. If you have guaranteed a price,
then that price must be the one charged
Make customers aware of any potentially negative aspects of a deal,
arrangement, contract or booking – for example:
If there is a cancellation (or re-booking, or change of booking) fee – tell
customers about it and make sure they understand how and when it applies,
and how much it is
Avoid over-booking situations – where the business takes reservations
knowing things are already fully-booked
Avoid using terms giving a false sense of confidence or which imply
something that does not, in fact, exist – for example, a ‘guaranteed’ booking
really should be guaranteed and not subject to some internal interpretation
meaning it is not really ‘guaranteed’
If certain seats, rooms or tables provide a less than optimal experience, tell
the customers about the down-side, the negative implications of their booking.
Give customers what they are entitled to – even though:
They may not ask for it – if a sale entitles the customer to a discount or a free
item of merchandise, then all customers must be provided with this as it
applies to the item/service they have purchased
They may not know it exists or applies to them and to their transaction.
Advise them when:
A new product or service they have previously shown an interest in becomes
available
A better deal on an item they have booked becomes, or is, available – such
as a package deal providing the same inclusions but at a cheaper price
A better alternative is available – for example, purchasing tickets ‘now’ will
save the customer having to queue in the hot sun when they arrive at the
attraction or amusement park
A possible price rise for something they are considering buying is imminent
They are close to becoming entitled to a bonus or discount – for example, a
significant price reduction may apply to their purchase if they spend a small
amount more on their purchase.
Maintain confidentialities – this means all the
information you have about a customer or business
must remain private and not disclosed to any other
business
Charge the prices quoted – charging a person or
business what you have said you will charge them is a
vital element of building trust with them
Advise suppliers when you have received more than what you ordered and or
more than what you paid for – as opposed to keeping the ‘extra’ items and
benefiting from their error.
Respect
Respect is the regard you have for customers and stakeholders.
It embodies – and can be demonstrated by displaying – a range of factors such as:
Consideration for them – and their situation
Politeness and civility – treating them ‘properly’ and as they expect to be treated:
using correct language; using their name; opening doors for them
Getting to know their needs, wants and preferences – as opposed to believing
their needs, wants and preferences are the same as everyone else’s
Treating them differently to other people – that is, providing them with deferential
treatment which shows the value you place on them as a person, business or
organisation
Acknowledging and showing appreciation for their time – as well as who they are
Recognising and appreciating the money they spend with you – and the
opportunities they provide for doing business with them
Never taking them for granted, ignoring them or providing them with sub-standard
products or services
Identifying and showing due regard for individual
differences – such as religious differences, social
differences, special needs
Demonstrating ‘nothing is too much trouble’ – when
dealing with businesses and customers: spending extra
time with them; being willing to change previously made
arrangements
Understanding every customer is a unique individual –
with unique needs, pressures, limitations and expectations
Demonstrating a genuine desire to be of service – as distinct from providing
limited service, or delivering service lacking in real customer focus.
Introduction
Productive business relationships are, in part, built on the ability to identify and take
up opportunities to maintain regular contact with customers, suppliers and other
relevant stakeholders.
This Section identifies many of these opportunities.
WORK PROJECTS
ANSWER KEY
CONTENTS:
6. Work values and ethics (code of conduct, code of ethics, etc.)
7. Company policies
8. Company-operations, procedures and standards
9. Fundamentals rights at workincluding gender sensitivity
10. Personal hygiene practices
ASSESSMENT CRITERIA
4. Personal growth and work plans are pursued towards improving the
qualifications set for the profession
5. Intra-and interpersonal relationships are maintained in the course of
managing oneself based on performance evaluation
6. Commitment to the organization and its goal is demonstrated in the
performance of duties
CONDITION
Student/ trainee must be provided with the following:
Trainings & career
Evaluation Resources
opportunities
Participations in
training programs
Technical
- Supervisory
Human
Performance - Managerial
Financial - Continuing
appraisal
Technology - Education
Psychological
Hardware
profile
Software Serving as reources
Aptitude test
persons in
conferences and
workshops
ASSESSMENT METHOD:
Direct observation
Oral interview and written test
Learning Experiences
Learning Outcome 2
SET AND MEET WORK PRIORITIES
Introduction
In any sort of business relationship there will almost always be a time when you are
required to conduct negotiations.
The negotiations must be conducted in a business-like and professional manner
within any applicable relevant cultural contexts.
This Section gives a context to the process of negotiation and presents advice for
effective and ethical negotiation.
Why negotiate?
Negotiation is sometimes undertaken because it is the
best way of resolving conflict or striking a deal, when the
parties involved believe that not reaching an agreement
means a loss for everyone.
In these circumstances the parties are usually willing to
make some concessions in order to achieve a win-win
situation.
That is, the true aim of a negotiation is for both parties to come out of the
negotiations as a winner – the idea is not for one party (the business you work for) to
win and the other party (supplier or customer) to lose.
Compromise is an essential element of true negotiation.
Not all negotiations, though, reach a successful conclusion.
Negotiation – defined
For our purposes, negotiation can best be defined as 'A process in which two or
more parties confront a problem and arrive at a solution which best meets the needs
of all of them'.
Implicit in this definition is communication takes place in which you try to get
approval, agreement or action from someone else, which may be different to what
they first wanted.
Note while the definition uses the term ‘parties’, many negotiations are conducted not
between groups of people but between two individual people (who may or may not
represent groups of people).
For example, a negotiation may occur between you and a supplier, between you and
a guest, or between you and the head of a certain department or business owner.
Also it is important to realise most negotiations often result in a less than perfect
solution (or outcome) for one, or both, parties.
Inherent in negotiation is the concept of ‘give and take’ where both
parties are likely to settle for less than what they may have
originally hoped for, but nonetheless a result that still represents a
win-win situation.
In some cases, the final result may even be little better than what
they hoped for. There are definitely times in negotiations where you
will give more than normal in order to achieve some other perhaps
long-term goal or related aim: ‘trade-offs’ are part of the business
world.
Realistically, this can mean what you lose today, you will (or hope
to) pick up tomorrow.
Be prepared
All negotiations involve resolving ‘issues’ or problems.
To be successful in any negotiating situation you need:
Good preparation – you need to research the issue at hand and become familiar
with all the relevant facts, policies, guidelines, and standard operating practices.
It is also useful if you can find something out about the person with whom you are
negotiating – what have their tactics been in the past? What are their strengths
and weaknesses? What are their stated and their
hidden goals and agendas?
Recognition of your goals and limits – no-one can
successfully negotiate without a thorough knowledge
of where they stand, what it is they are trying to
achieve and what their limits for negotiation are
You must know the limits as to how far you can go in the
negotiation – how far to discount a price, how much
extra you are allowed to use or offer as an incentive, what are the realistic
timeframes for delivering what is being discussed, what terms of trade you can
offer.
In addition, you must know what the establishment and or relevant department goals
are: on one occasion (for example) they may be to maximise occupancy
irrespective of the [room] rate (revenue) while on another occasion the aim may
be to maximise revenue regardless of the occupancy levels.
A calm, non-emotional approach – anyone who engages in negotiation must be calm
and collected.
Negotiations are no place for those who are quick-tempered, hot headed, easily
provoked or readily goaded.
While you must strive to remain professional during all negotiations, there is always
the possibility personalities will intervene and things can get very personal, very
nasty and very ugly in a short space of time.
The key is to stay focussed on the aims/goals and not on the person you are
negotiating with.
Good listening and communication skills – active
listening is required, which requires you to listen
‘between the lines’.
This includes reading the non-verbal language, asking
probing and open questions, and repeating/rephrasing
questions as needed.
It also involves knowing when to keep quiet – silence can
be a powerful communication tool and an effective
negotiation technique.
Knowledge of the relevant cultural context – when negotiating with a person from
a different culture, an appreciation of their cultural issues, preferences and habits
will demonstrate respect for them and facilitate a better understanding of the
potential issues.
It is important to realise different people have different perspectives and while you do
not have to agree with or practice their customs, an awareness of them will
always be appreciated and will always facilitate the negotiation process.
Knowledge of how to close a deal – a good negotiator will know when all that is
going to be said has been said, and will move to close the deal/finalise the
arrangement.
There is little point in going over and over what has already been said – it can even
be counterproductive: the process needs to move on and it is often you who will
have to instigate this.
Obtain agreement about what has been discussed, re-cap the relevant points, and
suggest the next step (such as signing a deal or contract, paying a deposit, filling
in a required form, or accepting a handshake).
Poor negotiators allow discussion to drag on and on sometimes taking so much time
they allow the other party to over-think the proposed arrangement enabling them
to retreat from what was (an hour ago) a perfectly good and acceptable outcome
for them.
Negotiation proper
Prior to beginning any negotiation remind yourself you must be flexible and prepared
to change or adapt any preconceived ideas you may have, and you may have to
make these changes and adaptations very quickly during the course of the actual
negotiation.
The following are sound general negotiating rules:
Try to witness more experienced colleagues negotiate – ask to
sit-in on other negotiations so you can gain experience about
what is said and done (the ‘dance’ that often characterises many
negotiations).
Pay attention to the statements made by both sides; the offers and
counter-offers; the objections and how they are responded to; the
body language.
Be business-like while remaining as friendly as possible – do not try to be a ‘hard
case’ (someone who refuses to yield, negotiate, or compromise)
Try to get initial agreement from all parties as to the agenda of the negotiation –
get consensus about why everyone is involved in the negotiation
At the same time try to get agreement on what the likely outcome will be – this
can give you an edge in the negotiation by focussing everyone’s thoughts on
what you hope to achieve
Deal with any issues that can be easily and painlessly dealt with, first – do not try
to tackle the big and hard issues at the very beginning: if you know the other
party wants a small item provided free-of-charge, then accede to this straight
away as a means of demonstrating you are prepared to negotiate and ready to
compromise.
Once you have done this, the ‘pressure’ is on them to do likewise.
Note: dealing with small issues immediately does not mean you have demonstrated
you will be prepared to deal similarly with bigger, more important and or more
expensive issues.
Take notes, refer to them regularly and try to get agreement
your notes accurately reflect what has taken place – these
notes act as a summary of the negotiation and can be used as
a guide for future meetings, future action, eventual formal
written agreements, and for any reports to be written as a
consequence of the negotiation.
They also provide the basis for review and reflection where
negotiations have to be continued at a later date.
Communication skills
Introduction
Any and all negotiations must be conducted within the context of the focus of current
enterprise business and marketing objectives.
This means all decisions taken by management and operational staff should support
attainment of the goals and objectives the business has set for itself in terms of its
Business Plan and its Marketing Plan.
This Section presents factors to consider in this regard as well as identifying possible
legal and ethical constraints applicable to the negotiation process.
Legal constraints
All businesses must operate within the law.
Legal obligations can be imposed by:
Legislation – the Acts and statutes of the country in
which the business is operating.
Where a business operates in different countries, it must
comply with laws of each of the countries in which it
works – it cannot simply comply with the
requirements of its ‘home’ country, or the country in
which its head office is based
Regulations – most legislation features ‘regulations’ established to provide
guidance and direction to enable the requirements of legislation to be met.
These regulations have the full force of ‘legislation’ and must also be complied with.
It is imperative all negotiations comply with the law of the land, and one of the
most important aspects is all negotiations must be conducted in a ‘fair’ manner
free from misleading statements, fraudulent misrepresentation and dishonest
practices or inferences.
Determining legal obligations
To identify the legal constraints your business is required to work under:
Speak to your supervisor, manager or the owner/operator of the business where
you work
Talk to more senior and experienced work colleagues
Make contact with authorities/agencies you know monitor and control the industry
in which you work – these are government bodies with legislated responsibility for
a range of issues such as (but not limited to):
Fair trade
Employment
Equal Opportunity
OHS
Liquor, food, gaming and tobacco
Visit relevant websites – see immediately above
Ask questions of industry associations as well as employer and employee bodies.
Penalties for failing to comply
Failure to comply with various legislated requirements can result in one or more
of the following penalties depending on the seriousness of the offence and or the
number of times the offence has been committed:
Verbal and/or written warning issued by the authorities – no further action taken
but the business is likely to be visited/inspected with an increased frequency
A monetary fine – which may, or may not, require attendance at a Court of law
A term of imprisonment – fines are often applied in addition to gaol time
Official and binding directive or ‘order’ – this may be to:
Undertake some action – such as make repairs, clean or repair equipment,
train staff, change an existing practice
Refrain from taking some action – such as direction to stop doing something
(such as to stop advertising a nominated product/service; to stop treating
people a certain way).
Business closure – in extreme cases of (usually, repeated) non-compliance the
business may be closed down. This is usually achieved by authorities
removing/revoking its licences and permissions to trade/operate as a business
and or to be registered as a business.
Ethical constraints
Ethical constraints are business practices the organisation elects to comply with.
This means they have a choice about whether or not they comply with them.
Some ethical constraints are imposed by various agreements the business
subscribes to, but the point remains the business has elected to be part of that
agreement/arrangement.
Sources of ethical constraints can be:
The standards the business publicly makes about
itself – such as the promises and content in their
Vision Statement, Mission Statement and/or Value
Statements.
Introduction
The essence of any business relationship is mutual benefit.
This Section provides tips and techniques to use when negotiating with others so
there are win-win outcomes.
Tactic Counter-tactic
The other party is delaying or stalling Use this time yourself to cool off, think
again, plan new strategy, get additional
information.
Try for a compromise.
Seek clarification for the cause of the
delay
The other party has set limits (for example Explain why these limits are
they have established boundaries of finance, unacceptable.
personnel, time, price)
Respond with your own limits.
Engage in open discussion of limits.
The other party overloads the discussion with Summarise relevant issues and try to get
information back to main topic.
Ignore the diversion and stick to the main
topic.
The other party moves from general to the Stick to the point
specific and vice versa
The other party acts as if they are stupid and Use questions to find out the other party’s
do not know anything position and how much they know.
Internet information
Take time to visit, view and listen to:
http://www.kantola.com/Margaret-Neale-PDPD-11-S.aspx - Clips 1,2 and 3
Introduction
Negotiation should be seen as a team effort – while you may be the individual
conducting the negotiation, your work should be the result of help, feedback and
input from colleagues.
This Section looks at the importance of information in negotiation, the role of
feedback, and how to use feedback in the negotiation process.
Providing feedback
When you are giving feedback as part of the negotiation process
the following tips on giving effective feedback should be adhered
to:
Be positive and constructive – even where you have to provide
negative feedback, make sure it is accompanied by something
positive.
Consider using the ‘positive-negative-positive’ sandwich approach,
sandwiching the negative comment between two positives:
“We can certainly provide travel on the dates and at the times you want but
unfortunately the price for those times is not negotiable: we can however
provide some discount vouchers, a free travel bag and our Priority Service
with this purchase.”
Make sure all feedback is fact-based – you have to be able, if challenged, to
provide evidence to support any feedback you give.
If you express the opinion a deal or package is the best value available, you have to
be able to prove this is the case
Respect the feelings of the person you are providing feedback on, or to.
Realise providing feedback has the potential to nearly always impact on what the
other person thinks, believes in or is committed to.
If statements are likely to impact on people’s feelings, consider using the ‘feel-felt-
found’ approach:
“I can understand why you feel [or ‘think’] the way you do – others have felt
[or ‘thought’] the same thing but they have found this option really is the best
choice providing excellent value-for-money and meeting the vast majority of
their needs.”
Immediate feedback is more effective than delayed feedback.
Providing feedback on-the-spot is usually best as it allows the discussion or
negotiation to develop based on the reality at the time.
Even negative feedback is best provided immediately
Restrict your feedback to only those things that can be changed – it is best to
provide feedback on issues the other party has the ability to alter.
If they are adamant they cannot increase their purchase prices, then feedback needs
to address reducing inclusions, service levels, quality, or some other factor.
Feedback is good
The point to keep in mind about feedback and input from
colleagues – and the other party – is it should be viewed as
assistance.
You must see it as help and guidance in the overall process of
negotiating a sale/required result.
The adage 'none of us is as strong as all of us' should be
It is also worth remembering ‘Feedback is the breakfast of Champions’.
Introduction
At the conclusion of any negotiation it is often (but certainly not always) necessary to
communicate the results to appropriate colleagues and stakeholders, within
appropriate timeframes.
This Section identifies timeframes for communicating results of negotiations, those to
whom communication may need to occur and the possible format and content of the
communication.
Written reports
In some circumstances (or in accordance with policy) management may require a
written report on the negotiations.
These reports should detail issues such as:
Those involved in the negotiation – by name, title and
position
The basic issues involved – an outline to set the scene or
context
Attempts at resolution/solution – what was offered and said; who said what
Reasons the above attempts failed or were rejected – if applicable: some
negotiations do not feature any rejection but this is not usual. There is usually
some contestation of what is offered, but not always
All relevant figures, data and statistics – prices, quantities, dates, discount
percentages, commission percentages
The desired position or preferred outcome for the business including room that
was available to manoeuvre
Details of final offers made
The final result
Who was notified, when and how
Lessons learned – from the negotiating process about ‘the
art of negotiation’ and the ‘other party’ and their tactics and
strategies
Recommendations for future action in relation to the
negotiated outcome or result achieved – what is the next
step? What are the next several steps? What timelines
apply? What resources are required?
These reports may need to be forwarded to head office, management or
departmental managers.
In essence, these reports may also have value to other businesses or operators
elsewhere within a chain or be of benefit to the operation of another department or
team within the organisation.
Where reports are produced for internal consumption you can expect them to be
discussed at the next management meeting so take time preparing them because
you will (in part) be judged by what they contain and how they look.
WORK PROJECTS
2.1 To meet the requirements of this Work Project you are required to provide
photographic, video or other evidence demonstrating you have conducted a
negotiation session with a potential customer:
2.2 To meet the requirements of this Work Project you are required to prepare and
present a written report communicating the result of the negotiation that was the
focus of Work Project.
ANSWER KEY
When conducting negotiations:
Act in a business-like and professional manner
Realise the outcome of a successful negotiation is a win-win result
Do the necessary research and preparation prior to the negotiation process
Involve others in the planning and preparation
Know your limitations for negotiating and never exceed them
Prepare a plan, know the plan and stick to the plan to the greatest extent possible
Use appropriate communication skills
Align the negotiation with workplace demands and focus
Ensure all negotiations occur within legal and ethical constraints
Use established negotiation techniques but seek a positive outcome for all parties
Be flexible and be prepared to amend offers to reflect emerging need, changed
circumstances and varying requirements
Use feedback from others to plan and guide the process
Communicate the outcome/results of negotiation promptly and comprehensively to
designated persons according to internal requirements.
ASSESSMENT CRITERIA
1. Training and career opportunities are identified and availed of based on
job requirements
2. Recognitions are utilized effeciently and effectively to manage work
priorities and commitments
3. Practices along economic use and maintenance of equipment and
facilities are followed as per established procedures
CONDITION
Student/ trainee must be provided with the following:
Trainings & career
Evaluation Resources
opportunities
Participations in
training programs
Technical
- Supervisory
Human
Performance - Managerial
Financial - Continuing
appraisal
Technology - Education
Psychological
Hardware
profile
Software Serving as reources
Aptitude test
persons in
conferences and
workshops
ASSESSMENT METHOD:
Direct observation
Oral interview and written test
Learning Experiences
Learning Outcome 3
MAINTAIN PROFESSIONAL GROWTH AND DEVELOPMENT
Introduction
After negotiations have been successfully concluded are commonly instances where
it is necessary to confirm the agreed arrangements, in writing.
Note, however, many arrangements remain purely verbal, and these verbal
arrangements serve quite acceptably as the sole basis for future action and can be
legally binding.
Contract – defined
A contract is an agreement enforceable at law.
An essential feature of the relationship formed by a contract being a promise by one
party to do (or refrain from doing) certain specified acts.
Simple contracts
The vast majority of all contracts are known as simple contracts: this is not to indicate
their composition or associated issues are simple in nature, but this term separates
them from other types of contracts (such as Contracts under seal, and Contracts
under record).
Simple contracts may be:
Formed orally
In writing
Implied (by courts, at a later date) from the actions of the
parties.
Elements of a valid contract
There are six elements of a valid simple contract: some texts will combine one or
more of these elements thus depicting a lesser number of elements yet they still
cover all the necessary factors.
All elements must be present for a contract to be valid.
The six elements are:
Intention to create legal relations – both parties must intend to enter into legal
contractual relations: the relationship cannot just 'happen'
Agreement – there must be both an 'offer' and an 'acceptance'.
One party must make an offer and the offer must be accepted by the other party.
Note just having the price of an article on the shelf or on an article does not constitute
'offer' but is what is legally known as an 'invitation to treat'. The price is inviting
the buyer to make an offer.
Consideration – there must be a promise of 'something for
something'.
Note the terminology used here ('consideration') does not refer to
the mental activity of applying one's brain to reflect on,
contemplate or consider the contract.
Note also the law is not concerned with the amount (or value) of the consideration,
hence 'peppercorn rentals' (very cheap prices for something which should or
could be much more expensive) are quite legal
Capacity – the parties must be legally able to contract, not prevented by their
status from entering into contractual arrangements.
People who are drunk, for example, are not of legal capacity
Certainty of terms – the contract must not be marred or confused by mistake,
misrepresentation or fraud
There should be no confusion about what obligations arise from entering into the
contract – there should be clarity of intent
Legality of objects – the purpose of the contract must not be illegal.
What if one of these elements is missing?
Should one or more of the above components be missing then a contract will be
deemed to be one of the following:
Void – the contract will have no legal effect at all
Voidable – where only one of the parties may avoid the contract, or alternatively
may compel the other party to perform their share
Unenforceable – here the contract is prima facie valid but no legal action can be
brought because of (perhaps) some lack of procedural requirement requiring the
contract to be in writing. In addition, there may be a statement to the effect that
the written document is/was never intended to be a binding document due to, for
example, lack of intention to create legal relations
Illegal – where purpose of the contract is contrary to public policy/statute.
Mere representation, unless deliberately fraudulent, does not form part of the
contract and so does not give rise to the right to sue for breach of contract.
Where the statement is deemed to be a term however, a remedy exists in suing for
breach of contract.
Decision as to what is a ‘term’ and what is ‘mere representation’ centres around the
intent of the parties – or what the courts infer as their intent.
Courts will use the following as guidelines in establishing this:
The stage at which the crucial statement was made during
the course of the transaction – the greater the time
between the making of the statement and the eventual
contracting then the more likely the courts are to infer the
statement was merely inducement to the contract and not
intended as a term
The importance attached to the statement by the parties –
the more important it is, the more central it is to the agreement, the more likely it
will be treated as a term
The form of the statement – where an oral statement precedes and finally
produces a written contract in which the intent of the verbal statement is not set
out, it is less likely that the statement is a term
Knowledge of the person making the statement – where the statement was made
by someone possessing some special knowledge or skill as compared to the
other party then such statement is more likely to be seen as a term.
Difference between a ‘Warranty’ and a ‘Condition’
If it is established a statement is to be considered as a ‘term’ of the contract, then the
next problem is to consider or rate its significance.
The obligations created by terms of a contract are not all of
equal importance and so a further distinction must be drawn
between a ‘condition’ and a ‘warranty’.
This question relates to the intention of the parties. The reason
for making such a distinction at law is because the remedies
are different for each area.
If the term that is breached is deemed by the courts to be only
a ‘warranty’ then the injured party can only claim damages.
However if the term that is breached is seen to be a ‘condition’
then not only are damages recoverable but the injured party can treat the contract as
being repudiated by the party who is in breach.
A condition then is a term going to the very root of the contract such that failure to
perform it would render the performance of the rest of the contract something
different in substance from what the defendant intended.
When the courts assess a term to decide if it is a condition or warranty, they will take
into account the context in which the contract was made and all the surrounding
circumstances.
Exemption clauses (also known as ‘exclusion terms’)
Where a party seeks to limit their liability or to exclude liability, a clause to this effect
may be inserted in the contract.
These are known as 'exemption clauses' or as 'exclusion terms'.
Many are found in what is termed 'standard form' in many contracts.
You should be aware in the case of signed documents containing exclusion clauses,
in the absence of fraud or misrepresentation, the party signing will be bound by these
clauses whether they read the document or not.
Privity
The concept of privity applies to provide rules to govern the legal relationship which
arises between various persons involved in a contract.
They are:
A person cannot incur liabilities under a contract if she or he is not a party to the
contract – that is, she or he cannot sue or be sued on the contract
A person has no rights bestowed on them under a contract to which they were
not a party. Note, however, where a person has benefits conferred on them under
a contract between other parties, courts are increasingly finding for these
persons.
In essence then, the parties to a contract cannot confer rights, or impose liabilities,
upon anyone but themselves.
Introduction
Any formal agreements entered into will bind the business to certain actions, and
may hold the possibility of legal action.
Introduction
From time-to-time, depending on the focus of the contract being considered there
can be a need to obtain specialist advice before accepting or otherwise proceeding
with a contract
This Section identifies the areas in which specialist advice may be required when
dealing with contracts.
WORK PROJECTS
3.1 To meet the requirements of this Work Project you are required to prepare and
present a formal business agreement or contract appropriate to the business
where you work.
ANSWER KEY
Introduction
Assuming you are happy with the agreements you have negotiated with others, you
will want to foster and maintain business relationships with those organisations.
It is likely, too, they will seek to maintain a relationship with you – providing they are
satisfied with the way you have discharged your part of the bargain.
Research
In addition it may be useful to undertake one or several of the following research
activities:
Talk to your network of industry contacts to identify what ‘the other party’ is up to
– other suppliers and certain guests/customers can provide valuable insight
Keep an eye on the news in the media for details about relationship partners are
doing
Be observant about media advertising that is undertaken by your other party –
what does it tell you they are up to?
Obtain and read relevant annual reports
Visit relevant web sites and opposition properties.
Scope of responsibility
It is standard practice in businesses for all employees to have prescribed ‘scopes of
authority’.
This scope defines the action the staff member can take without the need to consult
with other people, or without the need to obtain specific approval for decisions or
action.
Your individual scope of responsibility will:
Be explained to you when you join a business – as part of your
Induction and orientation
Be relatively small to begin with – there may even be no scope
of authority for the first few weeks and months
Grow as your experience grows – and enable you to do more
without reference to other people.
Important points to note regarding your scope of authority:
Fully understand what you are allowed to do and not allowed to do – clarify any
ambiguities, talk to management and ask for workplace examples of what is
allowed
Never act outside your scope of authority – ever: if you believe there is need to
act outside your scope of authority:
Refer the matter to a more senior person for their consideration and action
Ask a more senior person for direction, guidance and advice.
Failure to adhere to existing scope of authority guidelines can result in all scope
of authority permissions being revoked – in some cases, exceeding scope of
authority can be grounds for dismissal.
Customer expectations
Customers expect you and the business to honour agreements made.
Honouring an agreement from the customer’s perspective means:
Doing what you said you would do
Doing it when you said you would do it – or by the stated
point in time
Doing it for the promised price
Doing it to the expected, stated or agreed standard
Doing a little bit extra – that is, going beyond the strict
interpretation of the agreement.
This applies whether the arrangements were made verbally or are part of a contract.
Failing to meet these expectations:
Reduces levels of satisfaction – creating negative sentiment
Harms the trust and rapport that has been established – because the business is
seen to be lying and untrustworthy
Creates the impression your business is only interested in their part of the
agreement (the cash, the booking) – and not focussed on fulfilling agreed
requirements
Can give rise to legal action – such as damages and or enforced undertakings
Can result in adverse publicity – where the matter is raised in the media or
otherwise made public
Destroys the potential for on-going relationships.
Business ethics
Business ethics are the standards, values and beliefs applied within a business
context.
Suitable business ethics underpin the majority of business dealings within the
community and between people and organisations every day: without proper
business ethics, business would grind to a halt.
In practice, correct business ethics mean the business operates fairly and in
accordance with laws and community expectations and standards.
The business will not seek to take illegal or immoral advantage of another party, and
functions according to the standards and practices commonly accepted by others in
business.
For example, if the other party makes a mistake and supplies extra
goods or services that were not requested (and fails to charge for
them), the organisation is faced with a decision. Because you know
you have been oversupplied, and not charged, what do you do?
Keep the goods and say nothing?
Act as if you do not know what happened?
Go on as if nothing happened?
Proper business ethics require you (of course) to notify the other party and either
return the goods or pay for them.
If you do not do this – and this may be a very tempting alternative at times – you
must realise at some time your deceitful and dishonest behaviour will be uncovered
and your personal and business reputation will suffer irreparable damage.
Those who expose your poor behaviour will tell others (the network within the
industry is strong, and word spreads very quickly) and you will
find yourself quickly shunned by others, perhaps dismissed, and
perhaps even facing legal charges.
The moral of the story is pretty simple – do the right thing: all the
time, every time, no matter how appealing the alternative may
seem.
You may ‘get away with it’ for a short time, but you have been warned things will
always catch up with you.
Also, be aware the conditions you bargain for during negotiations – in an open and
honest exchange where others know you are trying to drive a hard deal – are one
thing and taking advantages of mistakes are something else.
The end result may be the same, but how you arrived at it is the differentiating factor.
Introduction
Even the best plans can go wrong.
The same applies to agreements and arrangements, so there will be instances where
adjustments – in consultation with the customer or supplier – need to be made from
time to time, in order to achieve the mutually desired outcomes originally agreed on.
This Section addresses adjustments which may be made to agreements.
Making adjustments
In effect ‘making adjustments’ alters the original agreement.
This may necessitate alterations to be written into a new or revised contract, and
signed by both sides.
In most cases though, a brief discussion usually resolves the
situation and identifies remedial action to be taken: a handshake
arrangement frequently seals the modifications.
While this approach is easier and highly attractive, you should
always check with others before committing to such an
arrangement.
Very often, deals which required a legal approach in the first place,
will also require the services of a legal advisor when changes are
being made.
Your approach to the issue of changes must be the same as your approach to the
initial negotiation – you need to be flexible, polite, friendly, and aware of the facts,
know the revised outcome you want to achieve, aware of the constraints and
parameters.
In lots of ways, factoring in adjustments throughout the period of the formal
agreement is very similar to entering fresh negotiations.
Never make changes to existing arrangements, agreements or formal contracts
without consulting the other party.
Keys when making adjustments are to:
Clarify revised arrangements – so there is genuine, mutual agreement and
understanding
Obtain approval for changes
Determine if extra charges (or refunds) need to be made – to reflect the revised
agreement
Advise others (as necessary) about the revised arrangements – so they can plan
and deliver as required.
Introduction
Business relationships must be nurtured.
They will not flourish – or even simply continue to exist –
unless you spend time caring for them.
This Section identifies ways to cultivate existing relationships.
How do they seek information to use as the basis for maintaining sound
business relationships?
What information types do they seek, and why?
How can they use or have they used this information to foster and maintain
the business relationship?
What tips, techniques and strategies can they recommend to optimise
effective and mutually beneficial business relationships? What things do
they identify as being things not to do or not to say when seeking to nurture
business relationships?
What do they do or what have they done to honour business agreements?
What is their personal scope of authority for honouring business
agreements?
What advice can they suggest where action to honour a business
agreement falls outside your allocated scope of authority?
What examples can they provide of instances where there has been a need
to make adjustments to agreements with a business relationship context?
Who and what was involved? How was the issues addressed and resolved?
What factors were taken into account as part of this process?
How do they personally identify the business relationships they need to
nurture on an on-going basis? How do they nurture these relationships?
What do they say and do? When? Where?
ANSWER KEY