Discuss in what authority or capacity of manageing directors have, that are relying upon to represent their respective companies to deal with outsiders, and, in particular, the signing of the purchase contract in question.
(Company Law)
Expert Answer
The Managing Director has the authority to sign a purchase contract for the purchase of materials required for production; these are contracts for an organization’s ordinary course or day to day business. Managing director cannot conclude substantial contracts. Managing director of an organization does not have the authority for replacing a plant’s machinery.
If A Managing Director is appointed with a technical defect
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