The Legal Aspects of Purchasing

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      how are you today ?? Today we want to share about  "The Legal Aspects of Purchasing". For example, Hasbi as a purchasing agent want to buy fax machine for his Murni Logistics Company. He buy 10  fax machine on behalf of his company with the Heng Sheng company. So, in this situation it involve 3 parties for this transaction between principal of Murni Logistics company, Purchasing agent(Hasbi) of Murni Logistics company and Heng Sheng company(seller). Based on the example given above the contract consider valid when it involve 3 parties in one transaction. The purchasing manager administers the purchasing function. The purchasing function consists of many tasks within the business entity, including supporting the company with the required
(1) Material
(2) Supplier
(3) Service

Authority of purchasing manager

  purchasing agent have three type of authority involve in purchasing. Firstly,express authority. Second, implied authority. Third, emergency authority.

Express Authority
   express authority is conferred to the purchasing manager by the principal. This authority usually occurs automatically when the purchasing manger is appointed.

Implied authority
   Implied authority is implied by the law at teh time the prinsipal grants express authority to the purchasing agent.Agent has the implied authority to negotiate the term of the contract. This include :

       - The Quantity
       - The Quality and other specification
       - The Delivery Condition
       - The Price
       - The Payment Date

Emergency Authority
  Emergency authority is used only when the purchasing manager must protect the principal's right or property When principal is imposible at the time we need.Furthemore, the purchasing agent does not have express or implied authority.


THE EXECUTION OF CONTRACT

The purchasing official has no personal liability providing that the following requirement are met:

1- name of the principal
2- all parties know that purchasing agent act on behalf on their company.
3- the agency relation is shown on the contract.
4- the purchasing agent act on scope authority given.

ESSENTIAL OF PURCHASE

- Passing title
- Buyer
- Seller
- Agreement of a contract.

THE REQUIREMENT OF CONTRACT

1.The parties must be capable
  - both parties must know what they are doing. The persons who enter into a contract must not insane person, alcoholic and drug addict.

2.Subject matter must be legal and valid
  - The contact must not against the law. The contract must be legal and not against public policy.

3.Consideration
  - something of value passes from one party to a second party in exchange for a promise of the second party.

4.The parties must reach an agreement by offer and acceptance
 - seller usually makes an offer and a buyer accepts,negotiates or rejects the offer.