› Whether reasonable people in position of parties would have understood communications as evincing intention to enter multi-million dollar long-term contract
Contract
› Agency
› Authority of agent
› Ostensible authority
› Whether officers of corporation held out as having authority to bind company to long-term multi-million dollar contract
› Whether principal's internal approval procedures known to third party negated ostensible authority
Equity
› Estoppel
› Conventional estoppel
› Mutual assumption
› Whether parties adopted mutual assumption of binding agreement
1Where a party knows (or has been informed) that a counterparty's internal approval processes must be completed before a binding contract can be formed, officers who have not completed those processes lack ostensible authority to bind the counterparty, regardless of their titles or the informality of dealings.
2Objective intention to create legal relations is assessed by reference to what reasonable people in the position of the parties, with knowledge of surrounding circumstances, would have understood from the relevant communications; on the facts, an ambiguous letter and informal oral statements by mid-level officers did not evince an objective intention to enter a multi-million dollar, 15-year contract.
3Claims in estoppel and misleading and deceptive conduct founded on alleged oral representations will fail where the court rejects the oral evidence relied upon and the contemporaneous documentary record is inconsistent with the representations alleged.
Case Details
Citation[2019] NTSC 10
CourtNTSC
JurisdictionNorthern Territory
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