Q Ltd is a large entity with different branches within Nairobi. Mtu is not only a member
Question:
Q Ltd is a large entity with different branches within Nairobi. Mtu is not only a member of the company but also works as the managing director of Q Ltd. Q Ltd has been deliberating in its board meetings whether or not to renovate its premises in order to attract more business. Indeed the Articles of Association of Q Ltd are amended in order to allow Q Ltd to borrow additional funds for purposes of completing the renovation works. It is notable that Article 8 of the Articles of Association require that before any construction work is allotted to any company, these companies have to tender applications, be pre-qualified and finally meet with the board of Q Ltd for approval to proceed with construction works. Mtu on his own cognizance decides to give the renovation job to a construction company, J&M Ltd, where he was also a member. Mtu informs J&M Ltd that he has the authority to enter into the renovation contract with them and goes ahead to draft and sign it. The contract is drafted on paper that has Q Ltd's letterhead. J&M Ltd trust that Mtu is acting in their best interest mostly because Mtu is not only a member but also the general manager of Q Ltd so they agree to the terms and conditions of the contract and sign it.
In the meantime the board of Q Ltd approve Brian Ltd, to work on the renovations. J&M Ltd has approached you because they are confused as to how to proceed. What will you tell them?