Summary

On the evidence, the chief executive of a racecourse management company had apparent or ostensible authority to sign an agreement with the claimant company granting it television picture rights, which was binding upon the racecourse owner.

Facts

The claimant company (C) sought to enforce a purported agreement with the first defendant racecourse management company (D1) and the second defendant racecourse owner (D2). D1 had entered into an agreement with D2 for the management and operation of D2's racecourse. The agreement provided for a consultative committee, which comprised of various individuals including the chief executive of D1, but it was agreed that the committee would have no authority to bind either party to the agreement. Thereafter, the chief executive signed a purported agreement (the disputed agreement) with C, granting C television picture rights in respect of the racecourse. The issue for determination was whether the chief executive of D1 had the authority to enter into a contract with C. C contended that the agreement signed by the chief executive was valid, binding and unconditional between itself and D2. Alternatively, D1 had acted in breach of the warranty of authority which it gave in so far as it purported to sign on behalf of D2. D2 contended that D1 did not have authority, whether actual, apparent or ostensible to enter into the agreement on its behalf, and the agreement was not binding upon it.

Held

On the evidence, the chief executive of D1 had no actual implied authority to enter into the agreement with C and D2 did not ratify the disputed agreement. D2 represented by conduct that the chief executive had authority to enter into the contract on its behalf. Accordingly, there was a representation to and reliance upon it by C such as was required by the law. The chief executive, whether acting in the name of D1 or D2 had apparent or ostensible authority to sign the agreement, and the agreement was binding upon D2 on that basis, Freeman & Lockyer v Buckhurst Properties (1964) 480 applied.

Judgment for claimant.