Forming enforceable contracts—authority
Forming enforceable contracts—authority

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Forming enforceable contracts—authority
  • Authority to contract
  • Quick view
  • Common law—general principles of agency
  • Types of authority
  • Apparent authority
  • Effect of agent contracting outside of authority
  • Why is it relevant?
  • Corporations
  • Background to Corporate Bodies’ Contracts Act 1960
  • More...

Forming enforceable contracts—authority

This Practice Note considers contracting authority under the law of England and Wales, which is an essential component of contract formation. It considers general principles of agency and contracting authority in the context of corporations generally, companies registered under the Companies Act 2006 (CA 2006), unregistered companies, overseas companies, limited liability partnerships, general partnerships, limited partnerships, unincorporated associations, incorporated charities (charitable companies and Charitable Incorporated Organisations) and unincorporated charities (charitable unincorporated associations and charitable trusts).

Where an entity has separate legal status, it is possible to make a distinction between instruments executed by the entity itself (eg using its common seal where available) or on behalf of the entity (eg by a person acting under its authority). This Practice Note focuses on a person’s contracting authority where they are executing an instrument on behalf of the entity. It does not consider the various alternative methods of execution that may be available (eg using a common seal). For guidance on the separate issue of execution formalities and requirements and protections in respect of due execution, see the Practice Notes referenced in the ‘Execution formalities’ column of the Quick view table.

Third party protections available in respect of contracting authority in the context of documents executed for a transfer or grant of an interest in property, or rules applicable to an entity in respect of holding

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