A corporation owned a parcel of vacant land on which it stored its construction equipment. The land was not large enough for the requirements of the...

A corporation owned a parcel of vacant land on which

it stored its construction equipment. The land was not

large enough for the requirements of the company.

When the adjoining landowner expressed a desire to

purchase the property from the company, the directors

informally considered the offer and agreed to sell the

land for $150,000. No directors' meeting was held to

formally deal with the matter. However, the secretarytreasurer, on the basis of the informal agreement

amongst the directors, contacted the offeror and

advised him of the price. The price was acceptable to

the purchaser, so the secretary-treasurer then drew

up a written purchase agreement that he signed on

behalf of the corporation in his capacity as secretarytreasurer. The purchaser also signed the document.

The directors later decided not to carry through

with the sale, and the purchaser brought an action

against the corporation for specific performance of

the contract.

What defences might be raised by the corporation in this case? What legal principles are involved?

Render a decision