ACCA Applied Skills · Corporate and Business Law (Global) · Agency law
Delmar Ltd employs Oksana as its sales manager. Without any express instruction, she regularly signs ordinary supply contracts for Delmar, and the board has always accepted this. Which source of authority most clearly covers her power to sign such contracts?
Her power arises from implied actual authority. It stems from her position as sales manager and the board's established practice of accepting her signing ordinary contracts, so no express instruction or emergency is needed.
- AAgency of necessity
- BImplied actual authority arising from her position and past conductCorrect
- CRatification after the contract is made
- DStatutory authority under company law only
Explanation
Implied actual authority arises from the agent's role, the nature of the business and the course of dealing between the parties. Oksana's position and the board's consistent acceptance support this. Ratification requires a prior unauthorised act, and necessity requires an emergency, neither of which exists.
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