Two months before the business was incorporated, John and Mark had

agreed that John should visit Waleter and Sams Ltd ("WS") in order to investigate the

purchase of an industrial loom that could be adapted for the manufacture of some of

Hi-Tech's gadgets. They agreed that John should conduct the initial negotiations, but

Mark told him not to sign anything until he had reported back to her. However, John

considered that the deal being offered was too good to miss and signed a contract for

the purchase of a loom for 25,500.

Mark was furious and immediate rang WS to tell them that John had no authority to

enter into the contract and they did not want it. WS's Sales Manager told her in no

uncertain terms that it was too late. He said that "a deal signed by your partner is a

deal" and they must make arrangements to pay for and collect the loom.

However, Mark heard nothing more and so, after the transfer, Mark, with the agreement

of John, entered into a contract with HomeTech Limited (HomeTech) on behalf of

Hi-Tech Ltd for the purchase of a similar loom. The loom is due for delivery next week.

Last week, however, Mark received an e-mail from WS demanding payment, and

threatening to issue proceedings if they do not receive the money within fourteen days

and arrangements are not made for the immediate delivery of the loom.

Mark wants to know whether there is a valid contract with WS and if so, whether the

company would be able to get out of the contract with HomeTech. She also wants

advice on whether or not she and John could be personally liable under either

contract.

Please email me explaining the liabilities of the different parties, under:

(a) the contract with WS; and

(b) the contract with HomeTech.