For a detailed look at the increasingly common electronic signatures, please read Sive Ozer and David Strong`s article on our News and Events page – www.marriottharrison.co.uk/media/mh-updates/mh-corporate-14/. The difference between actual authority (implicit or expressed) and purported authority was explained in Freeman – Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 1 All ER 630. A clear boundary has been drawn between the power created by a consensual agreement (real authority) and the authority created by representation (alleged authority). Although this is an English case, its principles have been applied to Australian cases such as Crabtree-Vickers Pty Limited v. Australia Direct Mail Advertising – Addressing Company Pty Limited (1975) 133 CLR 72. For example, if you are the sole director, but not the secretary of the company, you can stipulate in the Constitution that you can sign on behalf of the company. When you start a business as a business, the business becomes a separate legal entity. Your name is no longer valid if you sign contracts between the company and another party. Representatives must be allowed to sign for the company. These representatives may include board members, executives and other staff. If an unauthorized employee signs a document or contract on behalf of the company, this can lead to legal problems. This power can also be expressed by an amicable agreement between the client and the agent (Federal Court of Justice decision in Chew Hock San-Ors/Connaught Housing Development Sdn Bhd [1985] 1 MLJ 350). These agreements may take the form of a power of attorney or a list of authorized signatories for the execution of very specific documents.

This power can also be conferred by a letter of execution issued by the company itself. Executives who sign contracts on behalf of a company should indicate that they are signing in their official position. This can be done by adding the title or writing the name of the company and adding „by its representative.” Companies can also sign contracts by putting the company`s common seal on the contract. The label generally contains the company`s Australian business number (ACN) and the company`s registered name. Bishop Warden Property Holdings Limited v. Autumn Tree Limited has been the subject of discussion in legal circles. The case underscores why it is dangerous to rely on a director`s ability to resign on a board of more than one, on behalf of a company. The case has repercussions on many levels. It`s a reminder that you or those you work with may not have as much authority as you think. In a contract, the clause entitled „Representation on the authority of the parties/signatories” stipulates that all those who sign the agreement are entitled to the union of the two parties on the above terms.

Signing a contract is not like getting an autograph from a famous person. The signature is legally binding for a legal document, so it is important to ensure that the signature has been authorized by the business owner to make business decisions. From time to time, you want to allow an employee to sign a particular contract or type of contract, but not all contracts. This may be the case when the employee is located in another geographic area or is responsible for a specific part of the business. A great way to do this is to use a proxy document that carefully delineates the types of documents the employee can sign.