Week Four: Contract Creation and Management
August 1, 2012
Week Four:Contract Creation and Management
This is an evaluation of the video The Nature of Agency. It is important to discuss how contract formation was achieved even under the circumstances. Due to the legal issues presented, the video also offers insight on how the contract should have been achieved, it is important to discuss how other processes and procedures which if had been in place might of better mitigated the risks at hand (University of Phoenix, 2012). The video also presents another contract dispute resolution, although this is a fictional scenario it is important to discuss other resolutions besides arbitration. This paper will discuss the formation of the contract and how a contract administration plan could have been beneficial in the negotiation and signing of the contract between Quick-Take Video and Non-Linear Pro.
The principle-agent relationship can be defined as an individual or agent acting on or deciding on behalf of another entity or principle ("Investorwords.com", 2012). Express agency can be created with a written or oral agreement between the principal and the agent. In this agreement the principal authorizes a person to act as the principal’s agent (Pearson Learning Solutions, 2012). In the Nature of Agency video Janet, who was acting on behalf of Quick Takes Video as an agent, signs what she thought was a delivery slip, which was in fact a legal binding contract. Although Janet's actions meant well her signature on the contract has bound Quick Take Video in a three month lease with Non-Linear Pro and their faulty system. Janet is identified as the agent acting on behalf of the principle Quick Take Video. Although accidental contract formation was achieved by her actions, the contract is valid with Janet's authorization.
In most cases the agent has been directly given authority to legally...