What we say is that you can enter into a contract with a company and you are safe. That is food from commercial perspective. You dont have to search in the constitution or have to go look what your internal rules on tis. We can assume that everything is fine. The only time you cant do this is that if you actually know there is a fault there. You know the financial mgmer cant sign the contract for $150000. That is not really the situation that arises in practice. Bec why on earth would you enter into the contract that basis. The actual knowledge is not the real issue here it is the other one that you ought to have known. So it's not that , what we call imputed knowledge but you should have known that there was a fault there. Let look at how it work