Q1mcq
See model answer βA company enters into a contract with a supplier. The contract was negotiated and signed by a senior employee who had no express authority from the board to enter into contracts of this type. The supplier was unaware of this limitation. The contract is worth Β£500,000. Can the company avoid the contract on the basis of the employee's lack of authority?
A) Yes, because the employee had no actual authority and the contract is void
B) No, because the employee had ostensible (apparent) authority and the supplier acted in good faith without notice of the limitation
C) Yes, because only directors can bind the company in contracts over Β£100,000
D) No, because all employees automatically have authority to bind the company