Completing%20Various%20Agribusiness%20Forms

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• Completing Various Agribusiness Forms

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Next Generation Science / Common Core Standards
Addressed!

• CCSS. Math .Content. HSSIC.B.6 Evaluate reports
  based on data.
• CCSS. Math. Content. HSSID.A.4 Use the mean and
  standard deviation of a data set to fit it to a
  normal distribution and to estimate population
  percentages. Recognize that there are data sets
  for which such a procedure is not appropriate.
  Use calculators, spreadsheets, and tables.

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Agriculture, Food and Natural Resource Standards
Addressed!

• ABS.02.01. Apply fundamental accounting
  principles, systems, tools and applicable laws
  and regulations to record, track and audit AFNR
  business transactions (e.g., accounts, debits,
  credits, assets, liabilities, equity, etc.).
• ABS.02.01.02.c. Recommend and select tools and
  services to track, record and audit AFNR business
  transactions that meet business needs and
  priorities (e.g., electronic and paper based
  systems, etc.).

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Bell Work / Objectives

• Identify the components of a legally enforceable
  contract.
• Identify common legal documents used in business.
• Identify the common components of a
  lending/credit application.
• Identify the types and components of lease
  agreements.

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Vocabulary

• Bill of sale
• Capacity
• Cash lease
• Consideration
• Contract
• Contractual offer
• Deed
• Installment purchase agreement
• Installment sale agreement

• Juristic person
• Lease
• Minors
• Mortgage
• Principal
• Promissory note
• Share lease
• Statute of Frauds
• Title

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Interest Approach

• Ask your students to define a contract.
• Ask them what is the purpose of a contract.
• Use this discussion to begin the lesson on
  important forms used in business.

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What are the components of a legally enforceable
contract?
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Contract

• A contract is a legally enforceable agreement
  negotiated between two or more persons.
• A person may be either a juristic person or a
  human being!

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Juristic Person

• A juristic person is an entity, such as a
  corporation, business or franchise created by law.

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A legally enforceable contract fulfills
requirements in five areas

• Agreement
• Legality
• Consideration
• Contractual capacity
• Contractual forms

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Agreement

• Agreement (Offer and Acceptance)A contract must
  provide for an offer by one party and an
  acceptance by another.

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Legality

• A legally enforceable contract must have a lawful
  objective.
• If the satisfaction of a contract requires
  breaking the law or violating a statute or
  policy, it does not have a lawful objective.

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Consideration

• Consideration is defined as value given and value
  received as a result of contractual agreement.
• Each of the parties involved in a contract must
  receive value.
• Contract law does not require that the
  considerations be equal.

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Contractual Capacity

• Contractual Capacity is the ability to fully
  understand and comprehend the requirements of a
  contract as specified by law.
• All parties to a legally enforceable contractmust
  meet the legal requirements for capacity.

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Contractual Forms

• Contracts may be verbal or written both are
  legally enforceable.
• Some contracts, however, must be written, such as
  contracts that are regulated by the Statute of
  Frauds.

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Statute of Frauds

• This law requires certain contracts to be written
  and signed.
• The Statute of Frauds monitors several types of
  contracts, they are
• Sale of land
• Sale of goods exceeding 500
• Contract for services exceeding one year.
• Promise to assume the debt/legal responsibility
  of another.
• Promise to the administrator or executor of an
  estate.

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What are the common legal documents used in
business?
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Mortgage

• A mortgage is a legal document giving the lender
  a claim against the property if the principal or
  amount borrowed, interest, or both are not paid
  as agreed.

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Promissory Note

• A promissory note is a written promise to repay
  based on the debtors excellent credit rating.

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Deed

• A deed is a document which transfers ownership
  from one party to another.

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Bill of Sale

• A bill of sale is a written statement
  transferring the ownership of something by sale.

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Title

• Title is a document stating ownership of a
  property.

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Installment Purchase Agreement

• Installment purchase agreement is a purchase
  agreement made with all or part of the payment
  made at regular times over a specified period.

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Installment Sale Agreement

• Installment sale agreement is a document stating
  the sale of property for which a series of
  payments is made over a period of time.

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Lease

• Lease is a contract by which an owner gives to a
  tenant the use of property.

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What are common components of a lending/credit
application?
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Preparation

• A business preparing to borrow money should
  recognize that this borrowing process might be
  one of the most important selling operations in
  which the business participates.

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Lending Applications

• Lending applications will vary from one lending
  institution to another however, there is some
  basic information a lender will need.

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Basic Information

• What will you do with the money?
• How will it affect your business?

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Technology

• How the business is adjusting to the changing
  technology of its industry and customers?

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Other Information

• Characteristics of the businesss customers.
• Size of operation.
• Shifts in volume of business over the last
  several years.
• Availability and stability of the markets.

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Other Information

• Adequacy of facilities to meet goals.
• Projection of capital requirements.
• Earnings, and cash flow during the lending period.

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Managerial Capacity

• Age and experience of management.
• Types of training programs scheduled to keep
  current in their field.

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Collateral

• A list of available collateral to support such a
  loan.
• Audit reports from the past 3 to 5 years to
  reflect the financial strength.

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What are the types and components of lease
agreements?
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Lease

• A lease may be oral or written.
• Well-written leases can lead to better
  understanding and closer cooperation between
  landowners and tenants.

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Types of Leases

• A cash lease is one in which a fixed price has
  been set for use of the property.
• A share lease is one in which the tenant and the
  landowner share in costs and revenue.

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Cash Lease

• Good option for
• Any small business.
• A landlord that lives a distance away.
• A landlord may prefer a cash lease because there
  is
• Less risk and guaranteed income
• Fixed rent
• Less supervision by the landlord

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Cash Lease

• A landlord may not prefer a cash lease because
• It generally provides lower income.
• Landlord has less control of the property.

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Cash Lease

• A tenant may prefer a cash lease because
• It will provide more profit.
• The tenant can expand the size of the business
  and lower fixed costs of the lease.

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Share Lease

• Advantages of a share lease for the landlord are
• More opportunity for supervision.
• More probability the rent amount may come closer
  to the value of the land than other leases.

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Share Lease

• Advantages of a share lease for the tenant are
• Requires less capital than a cash lease.
• Landlord is more inclined to improve the property
  to increase productivity.
• Less risk exposure on cash outlays if product
  fails.

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Summary/Review

• What are the components of a legally enforceable
  contract.
• What are the common legal documents used in
  agriculture businesses?
• What are the common components of a
  lending/credit application.
• What are the types and components of lease
  agreements.

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The End!