Agent’s authority: limited to open contract?

In Wisecal Ltd v Conwell International Ltd ([2011] 4 HKLRD 275, CA) C was a company that owned a flat. C’s sole director and shareholder (its alter ego) gave F authority to sell the flat at an agreed price. C then refused to complete the sale. W (the purchaser) sought damages from C (or from F if F had acted without authority). At first instance, it was decided that F had had authority to sign a contract. F was nevertheless found to be liable because he had not been given specific authority to enter into a contract in the form used (containing, for example, the usual liquidated damages clauses). On appeal, F pointed out that C had not pleaded this point and it had been raised by the judge in the course of final submissions. If C had intended to argue that, were it to be held that F had authority, then that authority did not extend to those particular clauses then that should have been included in its pleadings. It was not. F’s appeal was allowed. C was ordered to pay the damages to W. The Court of Appeal seemed to doubt that C would have succeeded even had it pleaded that F had no authority to sign up to these standard contract terms.

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