The video starts with Non-Linear Pro filing a lawsuit against Quick Takes Video. Non-
Linear Pro purpose of filing the suit is to collect money that they claim is owed to them for the
lease that was given to Quick Takes Video for the editing equipment. Throughout the video,
there are a plethora of issues with the nature of the agency. This paper will analyze all issues
that were presented in the video. The paper will also include preventative measures that the
business could have used.
The first issue presented in the video is that one of the Quick Takes executive named Hal
did not inform the other executive named Karen about the lawsuit. Karen found out about the
lawsuit from the secretary named Mary. Karen was bothered by the situation and felt that Hal
should have informed her that the company is in legal trouble. In addition, Hal had a terrible
excuse for not informing her. Hal informed her that the lawsuit is not that bad. He explained that
he did not want to get her upset. Since she is the ace salesman, he wanted her to focus on sales
and not the shop problem.
Communication is a key factor to run an effective and efficient workplace.
Communication and consultation should be a top priority for these executives. Top management
need to make decisions regarding risk tolerance and priority actions that need to be executed.
Communication is an essential part of identifying risk factors that may affect the organization. If
proper communication would have been used effectively, this issue may have been prevented.
Another major issue presented in the video is that the executives do not know the
level of their worker named Janet. The video explains that Janet the employee signed a
slip for a lease when the product was delivered. Janet accidentally signed the form. Thinking it
was a delivery slip. Karen the executive believe that they shouldn?t be accountable for their
employee actions since they did not sign the slip. In addition, Karen points out that she was
out of town in L.A when the incident happened. She feels that they shouldn?t be held responsible
for someone else?s mistake if they weren?t there.
The executives contacted their lawyer named Henry to ask him how is it legal for Non-Li
near Pro to file a lawsuit against them if they did not sign the slip? ?The lawyer explained that
Janet was acting on your behalf. In law, she?s considered the executives agent, so whatever she
does binds the company. Karen explains that she is not an agent and had no authority
to do this.
Henry explained that the line might be fuzzy, since Janet order supplies and signs for
them. In addition, Hal stated that Janet was the go to person to work out the details with the
salesman. This particular statement can be construed as giving her the authority
and the third
party will rely on that. Henry strongly suggested to stick with the original grounds that the
product simply didn?t work as intended since the line is fuzzy with the authority
level. (Cheeseman, 2010)?
The video states that there are three types of authority
. The first authority
is the express
agency. ?Express agency is authority
that is directly given to an agent. Two parties are involved
in this process. There is a principal and an agent. The agent is the individual who acts on behalf
of the principal. The agent has the authority
to legally bind the principal. It is important for the
principal to be cautious in terms of what kinds of power the principal gives to the agent.
The second authority
mentioned in the video is called implied authority
is when the principal has not directly told the agent that he or she has a specific
. It is the kind of authority
that somebody in that agent?s position would usually
have. Implied authority
would be reasonable for third parties to assume that that agent would
have that kind of authority
The third authority
mentioned in the video was apparent authority
. Apparent authority
when the principal creates an impression that the agent has perhaps more power than the agent
should really have. (Cheeseman, 2010)? For this case, it seemed like Janet had implied and
. Since she purchases a lot for the partnership, their would be some type of
. It also seem like Janet had apparent authority
since Hal told the salesman that
?You can make the arrangements with her.? This statement creates the impression that she has
than perhaps she really does. Since Hal created that impression to the salesman,
the salesman can use that against them.
Quick Takes Video executives could have prevented mistakes if they knew the
level of their employees. When negotiating with contracts, the business should have a
clear understanding of the employees authority
. For example, the video explains if the business
wants an employee to just negotiate contracts, but didn?t want the employee to have the final
, it should be clearly stated on that offer that a contract is not formed until it
has been approved by the president or whoever has contracting authority
. It is imperative for a
small business to have a supporting documentation stating the level of authority
Throughout the video, there are a plethora of issues with the nature of the agency. This
paper analyzed all issues that were presented in the video. The paper also included ways that
the business could have used preventative measures. Communication was a key factor that the
executives were lacking and not having a clear understanding of authority
level for employees.
In order for Quick Takes Video to decrease risks, it is imperative for the executives to properly
communicate and establish guidelines for authority
Cheeseman, H. R. (2010). Business law: Legal environment, online commerce, business ethics,
and international issues. Nature of Agency Video. (7th ed.). Upper Saddle River, NJ:
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