Introduction
The legal side of project procurement incorporates a wide variety of issues among which there are contracts and agreements, rules, and policies the parties of a project are to follow. This paper outlines the definitions and explanations for such concepts as contract law, agency law, the Uniform Commercial Code or the UCC, and the Federal Acquisition Regulations or the FAR. In addition, the paper provides the examples for all of the concepts mentioned above within real life business situations and scenarios.
Contract and Contract Law Definition
Commonly, a contract is defined by the scholars as “an enforceable promise of agreement” (Chen-Wishart, 2015). A contract can be studied based on the three different notions. First one is the promise that is referred to as an action with one-sided focus; in other words, when a promise is made, just the side that is giving the promise is under attention. The level of seriousness of this side’s attitude towards the promise determines whether or not it will be fulfilled and to which extent the promised conditions will be followed (Chen-Wishart, 2015). The second important concept is the agreement that is, unlike promise, has two or more focus sides. A contract based on an agreement includes the obligations, duties, liabilities, and rights of all the participants (Chen-Wishart, 2015).
Third, the contracts are enforced by the state and the legal apparatus it creates. Differently put, the state is the side that ensures the trust between the participants of the contract since its legal apparatus is designed to protect the sides from the wrongdoings of their partners. The law that enforces the rules of behavior within a contract is referred to as contract law. It is applied in the cases when the parties have a disagreement and start clashing with each other regarding their interests and intentions. Contract law provides solutions in cases of contract breach, the uncertainties concerning the duties of the agreeing sides, silence or an attempt to escape a contract (Chen-Wishart, 2015). In other words, contract law is the force that binds the parties to their promises.
Agency Law Definition
The law of agency is based on two main concepts – an agent and principal. Even though the term “agent” is rather flexible and almost impossible to define clearly, legally, the notion of agency includes the representation of a principal by an agent and facilitation the contractual relations between the principal and a third party (Munday, 2010). One of the most common issues within the agency law is differentiating between the cases of agency and the legal problems of other types; often, it is hard to tell whether or not one should be regarded as an agent under particular circumstances and whether this person is to follow legal obligations of an agent (Munday, 2010).
The term “agent” is frequently used in a variety of situations, but not all of them signify the presence of an agent and principal kind of relations. Moreover, even if the term “agent” is legally applicable to a particular case, it does not mean that all agents undergo identical types of regulations and are to follow a fixed set of rules (Munday, 2010). The terms of an agency may vary in different cases. For example, one of the characteristics helping the experts to distinguish between the varieties of agency is the degree of liability an agent undertakes (an agent’s duties might only concern putting together the principal and the third side for a direct contact, or an agent may engage a personal liability of the contract of the principal) (Munday, 2010).
The Uniform Commercial Code (UCC)
A set of specific regulations is needed to manage business deals and transactions of the commercial character. These laws have to be universal across the state. The Uniform Commercial Code provides these standardized regulations in terms of sales and transfer of the personal property. For the first time, the UCC was published over sixty years ago, since that time it has been revised multiple times. The Uniform Commercial Code applies to individual business owners and entrepreneurs, as well as small businesses. In the United States of America, the UCC has been accepted by all the fifty states, yet there are differences in the laws currently enforced in various regions of the country.
Overall, the UCC has been designed with two major objectives that are setting order within the business world and providing general directions for the business makers, and standardizing the regulations and rules within business and trading so that the entrepreneurs from various parts of the country could do business with one another. The current Code includes nine parts. They are called articles and are designed to present provisions for various fields of legal commerce among which there are leases, capital transfers and bank deposits, credits, sales, investment securities, negotiable instruments to name a few. In relation to business contracts, the UCC helps the contracting sides to avoid outlining multiple legal formalities and save time for both parties as well as minimize the chance of the contract intervention by the lawyers. Some of the uniformed procedures and activities covered by the UCC are the processing of notes and checks. Commonly, the UCC cases deal with properties paid for with a help of loans.
The Federal Acquisition Regulations (FAR)
The Federal Acquisition Regulations affect the transactions where the federal government acts as a customer attempting to purchase services or goods of various kinds. For the federal government to acquire a particular commodity it first has to recognize the need and plan the future acquisition of services or goods. Further, the government is to form a contract and then act upon it providing its administration. FAR was designed to regulate the behaviors of the government employees and agencies involved in the process of goods and services acquisitions. The major objectives of FAR are to allow the government to participate in business relations in an open and fair way, following the standard rules and policies and satisfying their needs, at the same time, minimizing the administrative procedures and optimizing the operations.
Examples within a Selected Industry
The industry of choice for this paper is advertising. When it comes to the contract law in the field, the business are to avoid creating contracts that they would not be able to fulfill with the clients. In other words, when a business or an entrepreneur makes an offer that contains an intention to be bound they start to have legal liabilities towards the side that accepts the offer. In advertising, such offer may be a claim of a company to give back the money to the customers who find their product useless or are dissatisfied with its quality. Making a promise a company is to be very careful outlining the conditions under which the promised money will be returned (for example, the bad quality of the purchased product will have to be proved by the customer somehow). Making a vague promise that still can be recognized as a legally binding offer will oblige the business to go through with their promise and pay back to all the customers who decide to accept the offer. An example of a legally binding claim is an announcement that a company has already deposited specific funds to a bank getting ready to stick with their promise.
In this industry, agency law is applied when a business or an entrepreneur decides to use the services of an advertising agency. In such cases, the agency adds personal liabilities to the contract between the principal (the business) and the clients making their own offers and claims as tools of product promotion. In general, an advertisement is not considered an offer, but an invitation to treat (Keenan, 2007). That way, the promo actions, store displays, or media advertisements cannot be considered legally binding if they do not contain a specific intention to be bound. The Article 2 of the UCC outlining the legal regulations of sales specifically states that an advertisement is a communication to the public made by a seller (in some cases – by an agency as a representative of the seller) that binds the claimer to follow through with the remedial promise (if made) if it creates an obligation (U.C.C. – Article 2 – Sales, 2003). This regulation affects both private businesses and the Federal Government.
Conclusion
To sum up, there are multiple policies and regulations concerning the acts of commerce. As demonstrated by the examples, they all work together when applied to particular cases creating clear rules for the businesses to follow and minimizing the paperwork as a legal aspect.
Reference List
Chen-Wishart, M. (2015). Contract law. Oxford, UK: Oxford University Press.
Keenan, D. J. (2007). Smith & Keenan’s English Law: Text and Cases. New York, NY: Pearson Education.
Munday, R. (2010). Agency: Law and Principles. Oxford, UK: OUP Oxford. U.C.C. – Article 2 – Sales. (2003). Web.