AGENCY SCENARIO Mitchell Koors was the owner and operator of an expensive shoe store in downtown Calgary. Every year, Mitchell travelled extensively over the globe looking for unique shoes that he could purchase, mark up and sell for an outrageous profit in his store. Over the years, Mitchell found that his travel schedule was wearing him down: besides, he preferred to stay in Calgary and interact with his customers. Mitchell hired an assistant, Marcus Jacobsen. Once Marcus familiarized himself with the business, Mitchell sent him to scour the world for shoes. Marcus was a natural shoe-shopper and buyer; he had a keen eye for what the people of Calgary were looking for in their shoes, and was pleasant, charming and outgoing. All of Mitchell's vendors around the world adored him. Due to Marcus's proficiency at the job, Mitchell left all shoe-buying decisions up to him - he had proven himself to be an expert, and was invaluable to Mitchell. Unfortunately, while Marcus was shoe scouting in Prague, he made two very bad deals: 1. Marcus purchased from an edgy young designer $135,000 worth of shoes that were nearly un-wearable (the heels were five inches high and were placed in the middle of the sole). Mitchell is certain that Marcus missed the mark on this deal, and that the shoes will never sell with the people of Calgary; he desperately wants to return the shoes to the Prague designer for a full refund. 2. Marcus bought a cargo container full of cowboy boots from an Italian leather company for the sum of $200,000. It's not that Mitchell doesn't love the boots - he knows they'll be a huge hit. Mitchell thinks that Marcus overpaid for the boots, and he wants to renegotiate the contract himself. Mitchell is also annoyed with Marcus, because he expressly told him that he was not allowed to enter into any contracts for more than $150,000 without Mitchell's permission. Please answer the following questions: 1. Describe the nature of the relationship between Marcus and Mitchell. 2. Is Mitchell bound by the two unfortunate contracts that Marcus entered into? Explain why or why not. 3. What, if anything, could Mitchell have done at the onset of his business relationship with Marcus to avoid these problems? 1 School of Business 2016, Southern Alberta Institute of Technology