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In the context of contract law, 'authority' is the power an agent has to affect the legal relations of its principal. Where such authority exists, the agent will have the power to bind the principal to contract. Where such authority is absent, or the relevant act is outside the scope of the relevant authority, the contract will not be binding upon the principal. A person (A) may be bound by a contract entered into by another (B) with a third party (C) if A, by words or conduct, has represented to C that B has authority to contract on A’s behalf. This is known as the doctrine of apparent or ostensible authority.
In summary, Commentary: Authority to bind the company: Boyle and Birds' Company Law [6.13] explains that:
‘…to bind the company under the doctrine of ostensible (or apparent) authority, a person who has no actual authority to act on the company's behalf may be able to bind the company if he has been held out by someone with appropriate authority as a duly authorised agent of the company. The doctrine of ostensible authority is part of the general law of agency and it applies irrespective of whether the principal is a company or a natural person. A special modification of the doctrine known as the 'rule
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Millett LJ subdivided types of constructive trust into two categories, distinguishing between:•the constructive trust proper, where equity intervenes to prevent the legal owner from unconscionably denying the beneficial interest of another (known as the institutional constructive trust)•the
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