Monday, 11 August 2014

Sign Here

SIGNATURES on legal documents are important.  But I've often seen legal documents that people have signed incorrectly and sometimes have also forgotten to date. Here are a few tips on getting people to sign off correctly on legal documents:
  • Make sure the person signing the document has AUTHORITY to sign it.
  • Get the person to PRINT their name legibly underneath their signature.
  • If the signature needs to be witnessed, make sure the witness is an INDEPENDENT, adult person, and get them to print their name under their signature, too.
  • For security, get every signatory to INITIAL EVERY PAGE at the bottom.
  • Don't forget to DATE the document. Very often, the date is supposed to be inserted on the first page, but the signatures are placed on the last page. If there are attachments to the document, the "last" page will be before the first attachment.
In Australia, if a document is signed on behalf of a company, the Corporations Act 2001, section 127, says that the signatures of two directors (or one director and the secretary) are sufficient. If the company has only one director, then the sole director's signature is sufficient. It is, however, possible for a company's board to authorise a different way for documents to be signed, for example by a managing director acting alone, or by a particular employee. Which means that if  you ask a company to sign a contract but the person who signs it isn't a director authorised by a board resolution to sign it alone, then, under the law, that signature is not automatically assumed to bind the company. 

Which means, I would say, that about 80% of the contracts signed every day on behalf of companies in Australia probably aren't in the zone where it is beyond doubt that they are binding. Are you horrified yet? Wait until you get to court and have to argue that the signature on your important contract was valid. An ounce of prevention beats a pound of cure. Be wary of what you sign, and also how you sign it.  

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