Ag Education II

Colorado Agriscience Curriculum

Section: / Intro to Agribusiness II
Unit: / Understanding Entrepreneurial Concepts
Lesson Title: / Legal Aspects of Operating a Business
Colorado Ag Education Standards and Competencies / Standard 10.2 The student will understand entrepreneurial concepts
Competency 2-7 Legal Aspects of Operating a Business
Colorado Model Content Standard(s): / English Standard 4.2
Using reading, writing, listening, articulate speaking and viewing to solve problems.
English Standard 5.5
Students are using available technology to access information, conduct research, and produce carefully documented product.
Student Learning Objectives: / Upon completion of this lesson the student will be able to:
  1. Understand the types and functions of contracts
  2. Understand the limitations of minors in business affairs
  3. Understand business licenses

Time: / 50 Minutes
Resource(s): / “Teaching Agri-Entrepreneurship”, First Edition, 1998
New Youth Entrepreneur Curriculum, Online
Instructions, Tools, Equipment, and Supplies: / Italicized words are instructions to the teacher; normal style text is suggested script.
Monopoly game (one per group or one per class, depending on class size)
Computer projector or overhead projector
Copy of PowerPoint Presentation, printed one per student with 6 slides per page.
Copy, one per student, of
http://www.ag.state.co.us/ics/MeatInspection/ProcessorApp.pdf
Interest Approach: / This activity will help students understand the importance of rules in our government. In order to drive home the point that rules help protect, mediate, encourage, and enforce common practices, the students will play Monopoly with no rules. Have the board(s) set up on a table as students walk into the room and groups decided before they get to class. Groups should be four to six students or pairs per board.
Write the words protect, mediate, encourage, and enforce on the board.
Can anyone tell me the purpose of the four words on the board?
Answers should come around to the fact that these four words are the purpose of government rules and regulations, which are essential for order in any society.
Great job! These four words represent the reasons that we have laws in our country, state, and community. They protect the rights of the minority and seek to protect citizens. Just like in every other area, businesses have a set of rules that they must follow.
Raise your hand if you are up for a little competition! In front of me, I have set up the Monopoly game for a little game. As I put you into your groups, select a game piece for your team.
Has everyone played Monopoly before? Great! However, the rules that you normally use are no good in this room. Today, we are going to play with no rules at all! In other words, anything goes! Your team will determine how much money you start with, which direction you move around the board, and it’s your choice when to buy property. When I say “go”, you will have five minutes to attempt to “win” at Monopoly, while adhering to no rules or guidelines. Remember, there are still classroom behavior rules you need to follow, but the rules in Monopoly are not to be followed! “Go”!
Allow students to play Monopoly with no rules, while at the same time maintaining order in the classroom. After five minutes, ask students the following questions to prove that rules are necessary to success and growth.
OK, eyes back to me. I have a few questions for you to ponder over.
a.  Was Monopoly more successful with or without rules?
b.  Was Monopoly fairer to all the participants with or without rules?
c.  How can this lesson pertain to the business world?
Objective 1: / Understand the types and functions of contracts
As you have seen, there must be written rules in order to pass along accepted rules in our daily lives. Operating a business, or making a deal, is no different. In order to successfully make progress in any affair, we must have a written agreement between two or more people. We will take a few minutes to discover the various types of contracts and how they apply to common business situations.
Display slides 2-4, all of which cover the types and functions of contracts
Types of Deals
•  Contract
–  Contracts include three parts:
•  Serious and definite offer
•  A consideration, something for which a person is bargaining.
•  A serious acceptance of the offer.
•  Agreement
–  A non-legally binding deal, often with few set details, and often is not considered official.
Written Contracts
•  Written contracts remind everyone what was agreed upon, such as:
–  Dates of performance
–  Quality of goods or services
–  Specifications such as size, color, shape, or specific work to be done.
•  Advantages:
–  Written contracts make both sides think about details before they agree
–  Written contracts can be used as clear evidence to help you prove your side in court
Oral Contracts
•  Oral contracts are made by talking, not writing
•  Oral contracts are good for
–  Buying groceries
–  Buying magazines
–  A date for Friday night!
•  Oral contracts are not good for
–  Buying a house
–  Buying a business
–  Buying equipment
–  Long-term leases
–  Renting equipment
•  Disadvantages of oral contracts
–  They lead to mistakes, confusion, and misunderstandings
–  It’s hard to remember all the details
–  Each side tends to picture a different deal
–  It’s hard to prove your contract in court; it’s your word against theirs.
Ask the following questions to be sure the students were paying attention.
Is everyone with me so far? I have a few questions for you.
1.  What are the two types of deals?
2.  Why are written contracts better in business deals?
3.  Why shouldn’t oral contracts be used in important business deals?
Objective 2: / Understand the limitations of minors in business affairs
Use slides 5 and 6 to convey the rules regarding minors in business
Limitations for Minors in Business
•  A minor is anyone who is under the legal age.
•  It may be age 18 or 21, depending on the law
•  The law in most states says minors are too young to have the capacity to make a contract.
•  Therefore, in most states, adults cannot make minors perform on their contract
Exceptions to Rules for Minors
•  Are there ever exceptions to the rules for minors in business?
•  Yes! Sometimes courts will enforce a contract against a minor if he or she is emancipated!
•  What is emancipated?
–  Emancipation is defined as a minor who is out on his or her own, renting an apartment, running his or her own business, or married.
Have the students repeat the following statement with you over and over again as you say it aloud to reinforce the idea that minors can be responsible for their business decisions. Take the sentences apart piece by piece, until they can recite the entire summary without looking. This will help reinforce the minor laws relating to their own potential business ventures.
Emancipation is defined as a minor who is out on his or her own, renting an apartment, running his or her own business, or married! Therefore, if I am a business owner, I am responsible for my contracts!
Objective 3: / Understand business licenses
Project slide numbers 7 and 8.
Now that we understand your responsibility in keeping your contracts with the law, we can look at the methods used to register, permit, or license your new business.
Business Permits and Licenses
•  Most businesses need to register, get a permit, and or get a license.
•  Special permission from the government is needed for some businesses. Often, you need special training and have to take a test. See your lawyer to find out if you must:
–  Just register with the local or state government. “Hello…I’m in the home repair business.”
–  Gain a permit from the local government. “Hello, I’d like to go door to door, and need a permit.”
–  Prove you have special skills to get a license.
•  The problem is that most youth are too young to get a license!
So, I ask you again…what is holding you back in starting your own business? Well, it depends on what you want to do. There may be nothing holding you back, but at the same time, you may have to wait a few years until you are old enough to get a license. Therefore, spend time now establishing your business plan, obtaining financing, and polishing your business concepts so that when you turn 18 or 21, you can hit the ground running!
Review/Summary: / Use the Mother Goose Moment, whereby students take a chosen nursery rhyme and re-write the words with the newly learned content. Place the students into groups of three and have them re-write a nursery rhyme using some concepts they learned today. Give students 5-10 minutes to compile their rhyme before sharing with the rest of the class.
Application--Extended Classroom Activity: / Have students explore their careers choices and then explore what types of business permits or licenses are needed for them to start their own business after receiving an education. Connect this lesson to the careers unit and the long-term plan so students can prepare themselves with the needed resources.
Application--FFA Activity: / Encourage students to compete in the Marketing Plan CDE or the Farm and Ranch Business Management CDE, both of which cover business law.
Application--SAE Activity: / Develop an SAE into an entrepreneurial business in the community, obtaining all necessary permits and licenses. Encourage students to start small and begin with businesses that can be started at their age. Help students fill out the necessary forms for Colorado. Students could also fill out the FFA Entrepreneurship Award, which guarantees that one winner per chapter will win $100 for their efforts.
Evaluation: / Ask students the following review questions verbally:
  1. What are three factors that define emancipated minors?
  2. What are the two most common ages that minors can become legal business owners?
  3. What are two instances where oral contracts are OK?
  4. What are two advantages of written contracts?
  5. What are the three types of permission you must receive from the government?
  6. What are the four functions of laws and regulations?

Evaluation Answer Key: / 1.  Emancipation is defined as a minor who is out on his or her own, renting an apartment, running his or her own business, or married
2.  18 and 21.
3.  Buying groceries, buying magazines, a date for Friday night!
4.  Written contracts make both sides think about details before they agree, written contracts can be used as clear evidence to help you prove your side in court
5.  Registration, permits, or licenses.
6.  Protect, mediate, encourage, and enforce
Other: / See link for “Meat Processor License for Colorado”, whereby students will complete the license application for opening their own meat processing locker in Colorado. This is a great way to integrate business-licensing theory with practical applications. This activity will also help bring the students one step closer to owning their own business, by exposing them to simple forms.
http://www.ag.state.co.us/ics/MeatInspection/ProcessorApp.pdf
The following is a list of guidelines for filling out the form according to the simulated business they will be starting. You can also give them different information if you want to make it more localized.
·  Will be processing wild and domestic game
·  Name of applicant: own name
·  Name of business: Colorado Meats
·  Business address: Highway 34, Platner, Colorado 80823, Washington County
·  Phone Number: (970) 848-0000
·  Email:
·  Managers name: own name
·  Applicant is an individual
·  Signature at bottom

Unit 2, Lesson 7: Legal Aspects of Operating a Business 1