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Duty of Care Duty of Care
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Business Associations
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Question
BlueForge Inc. was properly incorporated. Maya owns 55 percent of its shares but is not a director, officer, or employee. While the CEO was away, Maya signed a $90,000 software contract with a vendor, writing "BlueForge Inc., by Maya, majority shareholder." The board had never authorized Maya to sign contracts, and the vendor had never previously dealt with Maya. When the CEO returned, BlueForge refused to use the software and promptly told the vendor that Maya lacked authority.
The vendor sues BlueForge and Maya personally.
(a) Is BlueForge bound by Maya's signature?
(b) Is Maya personally liable?
(c) Does Maya's majority-shareholder status alone change the result?