In a small private company Mary is a real estate agent and shareholder/director for a property development company, she has authority in her duty statement to enter contracts up to $100,000 The Company has not appointed a Managing Director but Mary often acts in this role and has even printed a business card where she gives herself this title. Mary has signed a contract to buy a property for $300,000 without talking to the Company or other directors. The other directors want to get out of the contract.

Answer all of the following;

a) Is this contract made by Mary binding on the company? Outline the statutory and case law which applies.

b) Explain the law that would apply and the result if the seller of the property knows that Mary is only a Real Estate Agent and not the Managing Director.

c) If the Company finds out that Mary has been given a secret bribe or commission to make this contract what action can be taken against Mary?