ASSIGNMENT QUESTION Warren is the "Acquisition Manager" for Black Petra (Aust) Ltd, which is a large public mining company. Black Petra (Aust) Ltd owns and operates several coal mines, railways and port facilities in Queensland. Warren is engaged in negotiation with Shovel Equipment Ltd, which is a company that specialises in producing and selling earth moving and mining equipment from their Sunshine Coast base. Shovel Equipment Lid has dealt with Black Petra (Aust) Ltd on three occasions in the past twelve months. On each occasion, they have dealt exclusively with Warren. No problems have been encountered in relation to past contracts. Each previous sale of Shovel Equipment Ltd products to Black Petra (Aust) Ltd was for trucks, parts and other equipment valued at less than $250,000 on each occasion. Black Petra (Aust) Ltd has a clause in its constitution providing that, to be effective and legally binding on the company, any single purchase of more than $750,000 must be approved by a resolution of the full board of directors. Warren signs a contract on behalf of Black Petra (Aust) Ltd for the purchase of a mobile coal crushing station for $1.6 million, without advising his board because he feels that it is too good a deal to pass up. An urgent meeting of the board of Shovel Equipment Ltd is called to discuss the authorisation of the sale of the mobile coal crushing station. Sally who is a non-executive director on the board of Shovel Equipment Ltd tells the other directors that when she worked as the company secretary for Black Petra (Aust) Ltd two years ago, this type of decision would normally need full board approval. Sally stressed that while no Black Petra (Aust) Lid board approval is now evident, she did not know whether this requirement still existed. Sally suggested that it may be prudent to execute the contract under the seal of Black Petra (Aust) Ltd. However, the board of Shovel Equipment Ltd dismissed her advice and immediately passed an urgent resolution _ .. authorising the immediate sale of the mobile coal crushing station at the terms stated to Black Petra (Aust) Ltd before any impediment may arise from Black Petra (Aust) Lid's senior management." Later, the board of Black Petra (Aust) Ltd considered the purchase of the mobile coal crushing station to be overpriced and they wished to renegotiate a new deal. Shovel Equipment Ltd insisted that a valid and enforceable current contract exists