Question 2 - Agency

Max is an accountant and runs Max's Accounting Services. Max hires Fleur to undertake taxation work for Max. As the owner, Max is in charge of making all purchases for the business.

Fleur needs specific software to perform her taxation work. One day, Max is not available so Fleur is unable to ask Max to purchase the software. Fleur decides to go to IT World herself, as she needs the software immediately.

At IT World, Fleur talks to Carl one of the shop assistants. Fleur hands Carl her business card. Fleur's business card states that she is a tax agent for Max's Accounting Services.

After some discussion, Fleur purchases a sofware package for $5,000 on behalf of Max's Accounting Services.

When Max receives the invoice for the software package, he is not happy. Max calls IT World and says that he has not given Fleur authority to purchase items for the business. Carl from IT World argues that he was under the impression that Fleur had authority, and the contract is valid.

Using relevant legal principles, discuss whether Max is correct - does Fleur have the authority to enter the contract for the software package on behalf of Max's Accounting Services? Who will be responsible to pay IT World?