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Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549

By Oxbridge Law TeamUpdated 04/01/2024 07:05

Judgement for the case Hely-Hutchinson v Brayhead Ltd

  • Richards, a director and chairman of defendant company, was accustomed to entering into various contracts on Defendant’s behalf and only informing other directors subsequently. Claimant was managing director of a company with whom Richards had contracted. When Claimant sued Defendant under contract, Defendant alleged Richards had no authority to enter contract in question on behalf of Defendant. Held:

Lord Denning MR

Implied Authority

  • Authority is may be express or implied

  • Authority is implied where it is inferred from conduct of parties and circumstances of case

    • e.g. X is managing director - X has implied authority to do anything

    • e.g. X is sales director - has implied authority to enter contracts of sale

Ostensible Authority

  • Ostensible authority often coincides with actual authority

    • E.g. where X is appointed managing director, also has ostensible authority to do anything usually falling under powers of a managing director

    • Thus here, even if X is expressly restricted from entering contracts of more than £1,000, will have ostensible authority to enter contracts of greater value

Facts

  • Richards had implied authority to enter into contract from circumstances of case

  • Richards did not have implied authority from nature of office

    • I.e. is nothing special about position of chairman entitling him to enter any contract without board approval

  • However did have implied authority from the acquiescence of board in his practice of entering contracts on behalf of company over period of many months 

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Company law Notes
805 total pages
1071 purchased

Company law notes fully updated for recent exams in the UK. These notes...