Contract Creation and Management - Nature of Agency

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Contract Creation and Management - Nature of Agency LAW 531 June 18, 2012 Contract Creation and Management - Nature of Agency Successful contract creation is essential for two or more different parties to conduct business. A contract needs to be full of specifics and lacking in ambiguity, otherwise interpretations, based on needs and experience, can and will be made by both sides. One such area of potential ambiguity in a contract is that of agency. Agency is a relationship where a principal (business owner, company officer, etc.) appoints an agent and “the agent is the representative of the principal and acts for, in the place of, and instead of, the principal.” (, 2010, Agency). In the video The Nature of Agency…show more content…
Had there been any clarification by a principal of her exact authority, or lack thereof, then Quick Takes may be able to dispute the contract formation. Contract Administration Improvements In the video, the only thing Quick Takes’ principles appeared to do to administer the contract was to let Janet make the arrangements. The principals of Quick Takes needed to take a much more active role in establishing a contract with Non-Linear Pro. One of the easiest things to do would have been for Hal to have simply amended his initial statement to ‘You can make the arrangements with her, but I have to approve of any agreement.’ This would have immediately cleared up any ambiguity about the extent of Janet’s implied and apparent authority, and would have rendered the lease she signed void. However, Quick Takes needs to have formal procedures in place to reduce risks with any future contract administration. One such procedure could be a post award orientation. This would be a process of communication between the two companies, through letter, conference or some other means, to ensure parties involved from both companies understand contract requirements and limitations as well as the roles and responsibilities of individuals in each organization (, 1994, Contract Administration). If Quick Takes had done such an orientation, the level of authority and any agency attached to each person, would have been made clear early on in the
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