On the 10^th September Merry asked her brother Sam, who was not part of the business but helping out, to approach a small business in the town where they live that was closing down. Sam was to tell them that Jodie was interested in buying their office furniture and equipment for 1000 but needed to collect it and move it to her own office premises by the 25^thSeptember. The owner Ian Clark says he will think about it.

On the 14^th September, Ian sees Sam in a local coffee shop and says that he would like to sell the furniture and equipment but that he wont be able to part with it until the 31^st September when he can deliver it to Merrys offices. Sam says this will be fine.

Merry then sends Ian an email saying she has changed her mind as her uncle has given her some office furniture and equipment. Ian writes back saying that they have a contract and that he will be delivering everything on the 31^st and will expect payment.

Using the scenario, write a section of your report about the elements of contracts and about the agency relationship in order to advise Merry.

Your report must:

• Analyse the elements and nature of contractual agreements
• Explain the principles of agency and their impact on business practice.

To gain a merit, your report must:

• Assess the validity of the contract.

To gain a distinction, your report must:

• Evaluate the implications of an agency relationship for the principal and the agent.