All India Bar Examination (AIBE) 2-II Previous Year Question Papers with Answers

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47.

B is a private limited company engaged in the manufacture and sale of shoes and is also one of your clients. A is, one of the legal managers of B. A approaches you and gives you instructions to file a suit for recovery of money on behalf of B against one of its vendors. You know that another legal manager of B, named C, had been authorized in a prior case. Is it necessary that you confirm if A is also authorized to give instructions on behalf of B ?

Principle :

When you are taking instructions from a client, it is important to check whether the instructions have been given by the authorized or appropriate person.
A: No, it is not necessary to confirm if A is authorized since B is your client; it is only fair to assume that its legal manager would be authorize.
B: Yes, as a matter of rule, it is necessary that you confirm whether A is authorized to give instructions on behalf of B.
C: No, it is not necessary. Under law, all legal managers are authorized to represent a private limited company.
D: Since C had been authorized to give instructions on behalf of B, it is only fair to assume that A also will be authorized.
E: It does not matter who is authorized to give instructions. All that matters is who is authorized to represent the company in the suit.

The answer is: B

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Explanation

The correct answer is :

B: Yes, as a matter of rule, it is necessary that you confirm whether A is authorized to give instructions on behalf of B.

Explanation:

While B is your client, and A is one of its legal managers, it is essential to verify whether A is specifically authorized to give instructions regarding the suit for recovery of money against a vendor. Legal authority within a company can vary, and it is crucial to ensure that the person providing instructions has the proper authorization to do so. Just because A is a legal manager of the company does not automatically mean they are authorized to handle every legal matter for the company. Therefore, it is necessary to confirm A's authority in this specific matter.