Question
Emma and Tom are the directors and owners of a company called River Pty Ltd ('River').Emma acted as the managing director even though she had
Emma and Tom are the directors and owners of a company called River Pty Ltd ('River').Emma acted as the managing director even though she had never actually been appointed. She entered into contracts on a regular basis on behalf of the company buying parts, employing staff and negotiating contracts. One contract she entered into on behalf of River was for $5000 worth of fish from Ice Ltd ('Ice'). The sales manager at Ice was not aware that Emma was not appointed as the managing director of the company.Two months later Ice requested payment for the fish. When Tom found out about the contract he refused to pay Ice as he claimed Emma had no real authority to enter into the contract on the company's behalf.
Required:
Advise Ice if it can enforce the contract against River. Refer to relevant cases and legislation in your answer.
(6 marks)
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