Technology
Entrepreneu
rship
Course Code: CSMG2913
Dr. Kashif Ali
Key takeaway
• Describe the sources and requirements of contract
• Concept of contract offer, acceptance, consideration and
defence
• Identify types of contracts encountered by a technology
entrepreneur
Introduction
•A contract is an agreement between two or more parties
that is legally binding and enforceable in a court of law. C
•A o
failure to perform is a breach for which the law offers a
remedy. n
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Contract formation
Obligation
I. The parties must have the legal capacity to enter into a
contract.
II. There must be an offer and an acceptance of that offer.
III.There must be consideration to support the contract.
IV.The subject matter of the contract must be legal and not
against public policy.
V. There must not be any viable defense, such as mutual
mistake, fraud, duress, etc.
Contract formation
The parties must have the legal capacity to enter into a
contract.
Ali, a 17-year-old high school student, decides to buy a car from a dealership.
However, since Ali is a minor, the dealership refuses to sell him the car. In this
case, Ali lacks the legal capacity to enter into a contract due to his age.
There must be an offer and an acceptance of that offer.
Sarah wants to sell her bicycle, so she tells her friend Noor that she is willing
to sell it for Rs.5000. Noor responds, "I accept your offer." The agreement
between Sarah's offer and Noor acceptance creates a valid contract for the
sale of the bicycle.
There must not be any viable defense, such as mutual mistake,
fraud, duress, etc.
Ali sells her old laptop to Mazhar Later, Mazhar discovers that Ali intentionally
withheld information about the laptop's malfunctioning keyboard. Mazhar may
have a viable defense based on fraud, as Ali misrepresentation could render
the contract voidable.
Contract formation
There must be consideration to support the contract.
Ahmad promises to cut his neighbor's lawn grass every week, and in return,
the neighbor promises to pay him Rs.500 each time. Both parties are
providing something of value (cutting the grass and payment), establishing a
valid contract with consideration.
The subject matter of the contract must be legal and not
against public
Emran policy.
agrees to sell her antique furniture collection to Ali. However,
undiscovered to Emran, some of the furniture items are considered stolen.
Once Ali discovers this, he can argue that the subject matter of the contract
is illegal, and therefore, the contract is void.
Contract formation
1. The offer: An offer is a proposal meeting certain
requirements, made by an offeror to an offeree and it must be
Identify the person or class of persons
Unconditional
Nothing from offeree except acceptance
Not considered a joke or facetious statement
Proposed agreement
Contract formation
2. The counteroffer: A response to an offer that
proposes the parties go forward on different terms
from those proposed in the offer is a counteroffer.
3. Acceptance: The acceptance is the assent on
the part of the receiving party to the terms of the
offer.
4. Revocation of offer or acceptance
5. Consideration: Consideration is the bargained-
for exchange of an agreement.
License agreements
1. Patent licenses
2. Know-how (licensor permits the licensee to have access to, and use)
3. Trademark (trademark holder permits to employed on goods & services)
4. Franchise
5. Technical service
6. Distribution (Owner engages a distributor to market produce in
unmodified form)
7. VAR (value-added reseller) and OEM (original equipment
manufacturer) (The owner of technology or a product licenses to market
technology as part of overall product)– OEM (B2B) & VAR (B2C)
8. Purchase agreements
Negotiation Fundamentals
• https://www.youtube.com/watch?v
=YnSk9xrOf2M
• https://www.youtube.com/watch?v
=8y4t3wwGkvc
Negotiation Fundamentals
• Negotiating is generally defined as “a
process in which two
or more parties attempt to reach acceptable agreement
in a situation characterized by some level of real or
potential disagreement.”
Entrepreneu
rs negotiate
Scarcity means that resources are limited, and they must be
acquired, applied, and managed efficiently.
Negotiation Fundamentals
• Regardless of the context or parties to a negotiation, all
negotiations consist of four basic elements.
There is always some degree of interdependence among parties; each
Interdependence party is in some way affected by, or depends on, the other. This implies
that there is usually a power relationship between the parties.
In most negotiation settings, some degree of conflict exists between the
Conflict parties. Each wants either something the other has or a part of some
resource that is common to both. The conflict may be real or perceived.
Negotiation involves attempts to influence and persuade. Each party
Opportunistic must believe there is opportunity for their efforts to be successful in
interaction order for them to want to enter into negotiations.
Possibility of In addition, for parties to desire to influence each other, they must also
believe that it is possible to reach an agreement.
agreement
Negotiation Fundamentals
What a party
wants.
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Behaviour & substance
an employee could be demanding a
20% raise. Though this may seem like
an unreasonable request, the important
thing is to understand why the person is
asking for the raise. Understanding
“why” means to understand the
individual’s interest. With this
understanding, a fair and reasonable
solution for both parties can be
determined.
Best alternative to a
negotiated agreement (BATNA)
or Walk-away alternative
Negotiation approaches
Individual who want to solve problem,
Accommodat
ing nonverbal cues
Individuals who
People who do not want
use the
to negotiate but are
compromising
Compromisin forced to, either by a boss
style seek equality Avoiding
g or because the situation
and fairness
is such that negotiations
throughout the
are vital to the business,
negotiation and
use the avoiding style.
seek to close the
diplomatic and tactful
deal in an
equitable manner. Those individuals who
Collaboratin enjoy negotiations and
Competing
Winner and loser in g love solving difficult
every negotiation. questions use the
collaborating style. Out
of box thinker
Negotiation approaches
Bargaining approaches
Distributive
Integrative
Cooperative
negotiation between
the negotiating
parties.
• Rational decision-
does not allow the other
making.
• Cause-and-effect party to achieve his or her
goals. There is a fixed pie to
relationships
be divided.
Negotiating outcome types
Positive-sum game. A positive-sum
Win-Win game is one where the negotiating
parties create new substantive and
relationship value as a result of
negotiating than existed prior to
their meeting.
Zero-sum game. No
Lose-Win Lose-lose Zero-sum game.
middle ground. Scarce Involves 3rd party as a
of resources. mediator or arbitrator.
Purchasing a car is
lose-win negotiation.
Management & labor
