THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NIGERIA DIPLOMA / PROFESSIONAL LEVEL EXAMINATION BUSINESS LAW - LAW OF AGENCY QUESTION 1 Chief Olanrewaju is the Managing Director and founder of Danfo Logistics Limited, a fleet operations company based in Ikeja, Lagos State. The Board of Directors passed an express internal resolution restricting any single officer, including the Purchasing Manager, Mr. Tunde, from entering into contracts exceeding N5,000,000 without prior written approval of the Board. In October 2023, Mr. Tunde negotiated with Eko Auto Sales Limited for the acquisition of three operational delivery vans valued at N12,000,000. Mr. Tunde presented himself to Eko Auto Sales Limited as having full authority to conduct all vehicle procurements for Danfo Logistics Limited. Eko Auto Sales Limited was completely unaware of the company's internal monetary restriction. During the transaction, Eko Auto Sales Limited secretly offered and paid Mr. Tunde a "buyer's facilitation bonus" of N600,000 (representing 5% of the purchase price) to secure the contract. Mr. Tunde accepted this money and deposited it into his personal bank account without disclosing it to Danfo Logistics Limited. Two weeks after delivery of the vehicles, Danfo Logistics Limited discovered the transaction limit breach and the secret payment. The Board now refuses to pay Eko Auto Sales Limited the N12,000,000 invoice price, claiming Mr. Tunde acted without authority, and demands that Mr. Tunde forfeit the N600,000 to the company. Required: (a) Explain the legal doctrine of "Apparent or Ostensible Authority" and advise Danfo Logistics Limited on whether it is legally bound by the N12,000,000 contract with Eko Auto Sales Limited. (8 marks) (b) Analyze the legal duties breached by Mr. Tunde as an agent under Nigerian Law, and outline the specific legal remedies available to Danfo Logistics Limited against both Mr. Tunde and Eko Auto Sales Limited regarding the secret payment. (8 marks) (c) State and explain FOUR conditions that must be fulfilled under Nigerian law for a principal to validly ratify an unauthorized contract entered into by an agent. (4 marks) (Total: 20 marks)