How to ensure the person signing the contract is authorized to do so by the company?

Question

This might be a stupid question, but I want to cover all my bases, after all, that's the whole point of having a contract, right?

I've prepared a contract for my freelance work. When I approach a company, and they send someone over to sign a contract, how do I know that that person is actually authorized to sign it?

For example, Company X can send over the janitor, and he unknowingly signed the contract on behalf of Company X. Let's say I did some work for Company X and after a while I demand payment, only to find that they deny ever having entered into a contract with me. And when I show Company X the contract, they said it was void because the janitor was not authorized to sign.

How do I avoid this situation from occurring? Is there a clause I must put into the contract?

Answer 1

Ultimately this is a question for your lawyer* not a bunch of other freelancers.

I am NOT a lawyer. I do not intend to give legal advice and make no representation that what I post will suffice for your situation.

Most contracts have a signature line, followed by a "for" line. I.E. John Doe for Company X.

Then in the body of the contract there's a clause stating something like:

Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party's obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms.

It's generally called an "authorization" or "representation" clause.

Should the signer not be authorized and sign, given this clause, you would legally go after the person signing the contract for misrepresentation, rather than the company.

Answer 2

How do you know the person they have sent is actually their janitor? How do you know it is not a complete stranger?

You could ask for some notarially certified document, proving they are they and proving they are responsible for company. However for small contracts or if you are not very specialized in something they need, it will be easier for them to find another freelancer.

Answer 3

I think that there several things that you can do. Search about that company on Google. Usually I prefer the company which address is verified. Also a company which have a good website or good social network engagement is authentic.

In the UK, Request and require that contract is signed by a Company Director (any director's signature binds the company). A short paid query to Companies House for copy of last accounts or register of members will define the Directors and company secretary or get buy credit reference from a credit agency