Corporate Liability: Tort, Crime and Contract

Crash Pty Ltd (Crash) has four directors: Alan, June, Apple and Jack. Daphne is the company secretary. Crash's constitution notes that the company cannot enter into contracts with Robber Ltd (Robber) without the unanimous consent of the board of directors.

Alan was looking at a catalogue and he discovered that Robber was selling some cutting-edge technology that would be very useful for the company. He contacts Robber and asks for more information about the product. After reading the information sent to him, he becomes very excited about the deal and asks Robber to send the contract for the purchase of the technology. While not aware of the content of Crash's constitution, Robber and sends the contract to Alan. Alan signs the document as a director of the company. He also asks Daphne to sign the document in her capacity as Crash's company secretary. When the rest of the directors discover the existence of the contract they state that the company is not bound by the contract.

Advise Robber.