Brilliant Limited ("the Company") is a private company registered in Hong Kong principally engaged in the wholesale business of Japan fashion. April, May and June are the only shareholders holding equal shares and the directors of the Company. Although there are three members of its board of directors, the actual day-to-day running of the business is left to one of them, April, who simply reports back to the board on the business she has transacted. Both May and June noted that April usually refers herself as the managing director of the Company, although she has never been officially appointed as such.

On January 3, April entered into a contract with a regular supplier, Frozen, in the name of the Company for a bulk purchase of clothes at a very attractive price. Performance of the contract will be due on March 3 ("Contract 1"). However, when April reported back to the board on the transaction of Contract 1, both May and June claimed that the products were outdated and would not be welcomed in the market, thus the Company would not be liable for the payment of Contract 1.

On January 10, April received a proposal letter from a Japanese supplier, Beauty Limited, for supplying young fashion with a new product line to Brilliant Limited. April called for a directors' meeting and the three directors unanimously agreed by a resolution that Brilliant Limited had no interest in the proposal.

As April was also a sole-proprietor of her own business, she then used the name of her own firm to sign a supplies contract with Beauty Limited ("Contract 2"), and eventually earned a substantial profit from Contract 2.

Required:

(a)

In the context of agency law and company law, with regard to the authority of April to make contracts on behalf of Brilliant Limited, advise whether Brilliant Limited will be liable for the payment of Contract 1. (17 marks)

(b)

In the context of company law, advise April whether she was in breach of directors' duties and her liability to Brilliant Limited under Contract 2.