PI operations and systems will be entirely computerized, and the PI owners want to begin the process to develop the IT systems to be in place prior to opening of the business. They have had several meetings with Teri Lang, an IT consultant whom they know from prior business dealings to be a skilled and trustworthy expert. Teri has agreed to develop and direct installation of an appropriate system for PI.

The owners want to give full authority to Teri to evaluate and purchase the best computer systems, associated hardware, and software programs for the business. The PI owners recognize Teri as the authority in this matter and want Teri to represent them as their agent in this process.

The PI owners are unfamiliar with agency agreements, and know they need to ensure that their agreement with Teri will be validly and properly written. Thus, they have asked BCA to create a contract to reflect their agreement with Teri, so that Teri can begin the process of developing an IT system immediately.

1. What are some risks and liabilities that could be associated with the agency contract between PI and Teri Lang?