Can anyone sign a contract on behalf of a company?

No. Only individuals explicitly authorized by the company’s governance documents—such as board resolutions or power of attorney—have legal authority to bind the company.

How is signing authority usually documented?

Through formal governance instruments like board resolutions, delegation letters, or powers of attorney that specify who can sign and any limits (contract value, type).

What happens if someone without authority signs a contract?

The contract may be considered invalid or unenforceable, and the organization or individual could face legal or financial consequences.

Are electronic signatures legally binding like wet ink signatures?

Yes, electronic signatures are generally legally valid if they meet jurisdictional standards and are executed by authorized signatories.

How do I verify if a signer has signing authority?

Verify against the organization’s signatory matrix and check supporting documents like resolutions or authorization letters before execution.

What is the difference between delegated authority and apparent authority?

Delegated authority is officially granted; apparent authority arises when third parties reasonably believe someone has signing power based on the organization’s behavior.

Do signing authority rules differ across industries?

Yes, regulated sectors like finance, healthcare, and government often have stricter requirements and audit controls.

Should a company maintain a signatory authority matrix?

Yes, it’s a best practice to define and document who can sign contracts and under what conditions, helping prevent unauthorized agreements.

Resources Archive

Contract Insights

7 Ways AI Accelerates Contract Review for Legal Teams

Explore seven ways AI accelerates contract review for legal teams, cutting review times, enhancing compliance, and reducing manual errors.

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Resources

Resources

7 Ways AI Accelerates Contract Review for Legal Teams

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