Can One Director Sign a Contract of Sale

The purchasing company determined a week after signing the contract that it had not executed the document correctly. This meant that they were not bound by the contract and could withdraw from the sale. In this case, they withdrew! However, a recent Supreme Court decision (Autumn Tree Limited v. Bishop Warden Property Holdings Limited [2017] NZHC 2838) overturned this assumption. It noted that any director of a corporation who has more than one director has a very limited power to enter into a contract on behalf of the corporation. If you are the other party, you must obtain confirmation that the representative or representative has been authorized to sign on behalf of the company. Article 127 of the law requires that the document be signed by: The change of ownership was duly registered at the company`s office on the morning of August 3 and Anna was registered as a new director in the early afternoon. However, Tina`s dismissal as a director was not registered until August 5 at the company`s offices. The purchase agreement was signed by Tina and the buyer on the evening of August 3, while Tina was still registered as a director with Anna in the Records of the Companies Office. If an agent purports to enter into a contract on behalf of a principal, allegedly under the authority of the agent, and the other party relies on the agent`s representation to enter into the alleged contract with the principal, the agent warrants that the agent is authorized to enter into the contract. The Agent shall be liable for damages suffered by the other party for any breach of this warranty of authority. If a contract is incorrectly signed on behalf of a company, it may result in the contract being unenforceable against the company.

Worrying for the administrator or agent who claimed to sign the contract on behalf of the company, they could be held personally liable. For example, if you are a director of a large company, you may want to consider appropriately delegating the authority to sign contracts on behalf of your company to others. You may want to consider the following: If a document claims to have been signed using one of the three methods mentioned above, there is a legal presumption in favor of a bona fide buyer for the value that the document has been validly executed. Nevertheless, it is preferable to seek the advice of local legal counsel regarding the enforcement requirements applicable in the respective overseas jurisdiction. If the Company does not sign the Agreement in accordance with Article 127 (e.B. if only one director signs the document if he is not the only director and secretary), no other party may rely on Article 129 and assume that the Company has duly accepted the document. The document cannot therefore be enforceable. All documents that previously had to be executed by affixing a company seal are no longer subject to this requirement and can now be executed either by two authorized signatories (a director and the secretary of the company or two directors) or by a single director in the presence of a witness. Legal requirements refer to “one document” signed by two people, not multiple documents. In addition, a `consideration` was regarded as a separate act which, together with the main document and all other counterparties, constitutes an act. To form a valid counterparty, the document must be executed as a document itself by a party. The law and general law allow third parties to assume that persons who sign documents on behalf of the company have real or apparent authority.

The case focused on whether the acquirer could rely on tina with the company`s clear authority to sign the contract, since under the Companies Act, a person dealing with a company may assume that the company`s internal requirements have been met (unless he or she is aware otherwise). If the Company has a corporate director, note that if a document indicates that it was signed by a corporate director, this will be read (section 44(7) of the Companies Act, 2006) as references to the fact that it was signed by a person authorized by the Corporation (i.e. .dem company director) to sign on his or her behalf. The proposed enforcement clause is as follows: Companies usually execute agreements by signing their directors and secretaries. Check the label of the execution block. It should be signed in the manner of “signed as an act of [name of counsel] acting on [the names of two directors or one director plus the secretary; in the alternative, an administrator, provided that the signature is attested, [an administrator/secretary] as a lawyer for and on behalf of [name of contracting authority] [under a power of attorney of [date]`. In intra-company disputes or in the case of “seller or buyer remorse”, it is often claimed that a company representative acted without authorization when claiming to sign an agreement. .