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Q. We have a dispute with a client regarding an advertising contract which one of our employees signed without written authorization from either company director. We tried resolving this with them but they are now threatening legal action. We would like to know where we stand on this.
| A.Your question is whether your company is bound by a contract entered into by your employee without the consent of the company directors. The answer will depend upon whether or not the party you were contracting with could reasonably have thought that the employee had authority to bind the company. Thus a purchase of high-value goods by a company executive is almost certainly going to be legally binding on the company but the same purchase made by the office cleaner would probably not be. |
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