John was the Sales Manager of ABC Co. Ltd. The business of ABC Co. Ltd. was to provide fitness equipment to fitness centres in Hong Kong. Under the employment contract, John could sell fitness equipment worth less than HK$100,000 and any amount above must be approved by ABC Co. Ltd. One day, John received a call from XYZ Fitness Centre. XYZ Fitness Centre was the biggest client of ABC Co. Ltd. and John had served this client for more than 5 years. XYZ Fitness Centre told John that one of its fitness equipment was broken, and XYZ Fitness Centre urgently needed to have a new one installed by next week. Without the approval by ABC Co. Ltd., John accepted the order from XYZ Fitness Centre and proceeded to sell the new fitness equipment to this company for HK$120,000. Later, XYZ Fitness Centre complained to ABC Co. Ltd. that the new fitness equipment was inferior in quality.

Questions:

(a) Discuss whether ABC Co. Ltd. would be legally bound by the contract made by John with XYZ Fitness Centre. You are required to cite a relevant case to support your answer.

(b) Applying the concept of ratification of contract, discuss whether ABC Co. Ltd. would be legally bound by the contract made by John with XYZ Fitness Centre if it accepted the payment from XYZ Fitness Centre after knowing about this contract