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Contract Creation

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Contract Creation and Management
Cheeseman (2010) stated, “Express agency is the most common form of agency. In an express agency, the agent has the authority to contract or otherwise act on the principal’s behalf, as expressly stated in the agency agreement. In addition, the agent may also possess certain implied or apparent authority to act on the principal’s behalf”(p.461). A business owner needs to clearly define the responsibilities and authority that each employee holds. The business owner also needs to clearly state which individuals within the organization have the authority to enter into a contract on the organizations behalf. The author will discuss “The Nature of Agency video” and issues regarding express agency.
The Nature of Agency video
In the scenario described in “The Nature of Agency video” Non-Linear Pro sued Quick Takes Video for breach of contract on a three month lease agreement. Quick Takes Video leased some video editing equipment from Non-Linear Pro that didn’t operate according to Quick Takes Video expectations. Apparently when the equipment was delivered Janet an employee of Quick Takes Video mistakenly signed a three month lease agreement thinking it was a shipping confirmation request. The management of Quick Takes Video called their legal representative and discovered that it may be reasonable to assume by a third party that Janet had the authority to enter into a contract on behalf of the organization.
Authority
Within an organization employees operate at different levels of authority and there are many different types of authority. The employer can directly tell the employee what kind of decisions that they are authorized to make on behalf of the organization. Implied authority is authority that is assumed by an employee performing job duties that require a level of authority. Army Lawyer (2008) stated, "When such authority is…...

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