Contract Creation and Management Essay

Submitted By jxrive
Words: 1161
Pages: 5

Contract Creation and Management

Contract Creation and Management
December 02, 2012

Contract Creation and Management Today’s contract creation and management (Cheeseman, 2010) venture was drafted from the option two scenarios The Nature of Agency Video. “The Nature of Agency Video” entails two companies entering into a dispute; Non-Linear Pro is suing Quick Takes Video for breach of contract on a three-month lease agreement. Presumably, Quick Takes Video leased editing equipment from Non-linear Pro; that proved to be defective and did not meet the client’s standards. In the process of delivering the equipment to Quick Takes Video the equipment was received and signed by Janet an employee of Quick Takes Video. Janet misguidedly signed a three-month lease agreement for the equipment assuming that she was signing a shipping confirmation receipt. Express Agency As stated by Cheeseman (2010) the “express agency is the most common form of agency. In an express agency, the agent has the authority to enter into contract or otherwise act on the principal’s behalf, as expressly stated in the agency agreement. Moreover, the agent may also possess certain implied or apparent authority to act on the principal’s behalf” (Cheeseman, p. 461, 2010); the issue is one that involves determining if a contract was ever formed as it involves examining actions that may validate the terms of a contract. In addition, defining who in the organization has the authority to represent the organization as an expressed or implied agent (Cheeseman, 2010).The owner and president Mr. Hal Ballson of Quick Takes Video hired legal representation and learned that it may be reasonable to assume by a third party that Janet has legal authority to enter into contract on behalf of the organization. Levels of Authority Managing an organization successfully requires delegating responsibility with that responsibility in the realm of authority comes expressed and implied authority. An organization is known as the principle and some employees are considered agents. Certain agents have the authority to act on the companies behalf. In this situation, the principle is Quick Takes Video, and the agent is Janet. Janet is an agent acting on the principle’s behalf. As an agent Janet has responsibilities that may require a certain amount of authority (Cheeseman, 2010). There are two different types of authority, one is expressed, and the other is implied. Expressed authority is directly given to an agent, whereas implied authority is not directly given but rather implied. Implied authority also binds the principle; this is known as apparent authority. In which the principle creates the impression that the agent has more authority than, he or she is aware of. Implied authority is assumed by an employee performing his or her duties that may require a certain level of authority. Janet’s responsibilities entailed the shipping and receiving of products and supplies for the company. It is implied that Janet has the authority to sign for shipping and receiving materials and equipment. In this scenario it is reasonable to consider that Janet is an integral agent. From a Non-Linear Pro perspective; Janet reasonably could have the authority to enter into contract on behalf of the company, as it was the impression of the salesperson asked to see Janet for arrangements (Cheeseman, 2010). Moreover, as illustrated in the video; Mr. Ballson the owner authorized Janet as a person with the implied authority to make necessary arrangements. Additionally, Mr. Ballson advised the Non-Linear Pro salesperson to make necessary arrangements with Janet (Cheeseman, 2010). Although it was never indicated that Janet had limited authority, or that she could not enter into contract on behalf of the company; the salesperson reasonably assumed that Janet had the necessary authority to enter into contract on…