ABSTRACT
This chapter is concerned with how companies enter into contracts and assume other legal obligations, and particularly how individuals may make the company liable under a contract, sale, or other legal transaction. It is also concerned with the tortious and criminal liability of companies. In some cases the company will incur direct obligations based on the “organic theory” which identifies individuals who are the “directing mind and will of the company”. When these people act, their knowledge and intentions are attributed to the company itself. So, for example, the knowledge of the Managing Director may be attributed to the company so as to make it guilty of an offence involving mens rea. In other cases, the company may act indirectly through agents. (In practice, outsiders rarely deal with the board of directors or the members in general meeting: most dealings are with the company’s agents or employees.) In all cases the question is whether the organ or person has the company’s authority to do the act in question. That authority may be actual or apparent.
