VDMT P/L v Francher P/L

VDMT P/L brought an action against Francher P/L for breach of contract, alleging that Francher had entered into a contract for the sale of goods but had failed to perform its obligations under the contract. The dispute centred on whether the director of Francher who had negotiated and signed the contract had the authority to bind Francher to the contract. The case was heard in the Federal Court of Australia.

The court was required to determine whether the director of Francher had actual authority to enter into the contract on behalf of Francher, and if not, whether the director had apparent authority. The court noted that the size of the transaction was large relative to previous transactions that the director had been authorised to negotiate, and that the agreement was not subject to finance. The court also noted that the parties had agreed on the price of the goods.

The court held that the director did not have actual authority to enter into the contract on behalf of Francher, as the contract was outside the scope of the authority granted to the director. The court also held that the director did not have apparent authority, as there was no representation made by Francher that the director had the authority to enter into the contract. The court found that Francher had not led VDMT to believe that the director had the authority to enter into the contract, and that VDMT had not relied on any such representation in entering into the contract.

The court dismissed the claim brought by VDMT, finding that Francher was not liable for breach of contract. The court held that the director of Francher did not have the authority to bind Francher to the contract, and that Francher was therefore not liable for any breach of the contract.