Related Disciplines
Core concepts
This domain covers the supporting disciplines: business law, economics, quantitative methods, and professional ethics. In business law, know the essentials of contract (offer, acceptance, consideration, intention), the law of agency, and the duties of directors. In economics, understand demand and supply, elasticity, market structures, and the role of government. In quantitative methods, be able to compute averages, probabilities, and simple forecasting. In ethics, know the fundamental principles of integrity, objectivity, confidentiality, professional competence, and professional behaviour.
Common traps
Questions often test whether a contract exists when an invitation to treat is mistaken for an offer - a display of goods is generally an invitation to treat, not an offer. In economics, a trap is confusing a movement along the demand curve (price change) with a shift in the curve (other factors). In ethics, a common trap is a confidentiality breach justified by convenience - confidentiality may only be breached where there is a legal or professional right or duty to disclose.
Worked example / rule of thumb
A shop displays a television at an incorrect low price. A customer demands it at that price. Rule of thumb: the display is an invitation to treat; the customer makes the offer, and the shop may accept or reject. No binding contract exists until acceptance. Apply the same four-part contract test to every scenario: offer, acceptance, consideration, intention.
Exam technique
Identify the legal or ethical principle first, then apply it to the facts.