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Appraising Legal Concerns - Research Paper Example

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Legal Concerns for Procurement There are two types of operations that any company conducts. One is the inner and the other is conducted and managed outside the company. ‘Inside’ represents all the operations in which only employees of the same company are involved…
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Appraising Legal Concerns
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Download file to see previous pages Contract Law Contract law is the most fundamental governing law of any procurement project. It is because procurement projects commence after signing the legal contract. Managers must be completely aware of all legal obligations of a contract so they may not step out of line. A comprehensive definition of contract law is; “An agreement between two or more persons which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter, a legal consideration, mutuality of agreement, and mutuality of obligation.” (Fleming, 2003) But more suitable definition of contract law (regarding procurement management) is; “A contract is a mutually binding agreement that obligates the seller to provide the specified product and obligates the buyer to pay for it” (Institute, 2000) However, most of procurement projects involve more than just mere buying and selling of goods and services. Procurement includes partnerships and joint ventures and they legally bind the participants to perform an action. That is why it is better to use the definition for contract law which has a broader perspective. Taking a deeper look into the broader definition, following ten points can be concluded; a. A contract is a promise between two or more people or two or more parties b. ...
The other party that needs to accept the offer has to accept it unconditionally f. If the accepting party wants to make adjustments (modification) to the original offer, the original offer will become void and a new offer will be formed. This process can continue until there is an offer from one party and an unconditional acceptance of it by the other. g. Concurrency is obligatory; all parties to the contract must agree to the same exact terms. h. A contract becomes only legal when there is ‘consideration’ involved. Consideration is anything that has value and is offered in exchange of something (goods or service). Consideration doesn’t necessarily have to be of the same value. i. The purpose of a contract should be legal as illegal contracts have negligible value in the eyes of law. j. All contracts need to be in the proper legally acceptable format. This usually requires the contract to be in black and white form (on paper) and signed. Mostly real estate contracts and contracts of simple buying/selling are classic examples (Fleming, 2003). Agency law By the standards of this law, any agent that will be appointed by the company (principal) will hold the same position in the deciding about procuring goods as the CEO. In other words, the agent will be acting on behalf of the company. Whatever contract he will enter the company into, the company will be liable to abide by the rules and promises of that contract. In the Latin phrase, the relationship between agent and principal is described by the phrase, qui facit per alium, facit per se, i.e. the one who acts through another, acts in his or her own interests (Wikipedia contributors, 2011). Regarding the matter at hand which ...Download file to see next pagesRead More
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