Was an agent acting for the company?

Autumn Tree

Autumn Tree helps answer the question…

An agent did a deal… is the company bound?

Step 1

Fid the act fall within the SCOPE of the authority? Board acts as a board (s 128); one of several directors acting alone has little (Autumn Tree); a sole director can act alone (s 127). → If yes, company's bound. If no, go to 2.

Step 2

Did the director MISUSE a power they genuinely had?
- the director might have breached a duty! BUT that doesnt mean that the act wasn’t within their powers. So the deal is valid but voidable: the company can choose to unwind it (unless an innocent third party is protected)

Step 3

An outsider can assume the company followed its own internal rules unless they ACTUALLY knew something was wrong (deliberately not asking. Wilful blindness counts as knowing).

Step 4

If the deal clearly doesn't benefit the company, that's a red flag and relying on appearances may be unreasonable.