30. Corporation A Was Issued A Loan By Bank B. Corporation A Is Now Claiming That Its Chief Financial Officer Did Not Have The Authority To Obtain The Loan And Therefore Is Refusing To Honour The Terms Of This Bank Loan. Based On The Indoor Management Rule:
In the absence of notice of irregularity or suspicious circumstances, everything in the operation of a corporation that appears to be properly done (such as a CFO borrowing money) may be relied on by an outsider and will bind the company—unless a contracting third party knows about a particular restriction, in which case such restriction would be binding.
