Further info:  the signatory is just an employee who will sign under a delegated authority. Not a director or shareholder, just a plain old employee.

"The signatory are" is so unpleasant as to render the entire contract void and punative damages payable by the draftsman

Even on a certainty of parties level that doesn’t work for me

Sounds iffy. And lazy.

Wang's Upon a Time08 Jan 24 14:20 Reply|Report

"The signatory are" is so unpleasant as to render the entire contract void and punative[sic] damages payable by the draftsman[sic]

heh

Never seen that. Assuming the contract is deemed to have been signed (ostensible authority perhaps?) what loss would the counterparty have suffered? Might just let it go but would definitely delete the personal liability.

I can't see how that works contractually, the parties are the two companies, not the individuals signing, so it won't create an obligation on the individual, possibly one on the company to procure the individual indemnifies but probably not on that wording.

There are issues around ostensible authority and I do seem to recall there are circumstances where someone who knowingly signs something they are not authorised to do can be personally liable but that liability is to the company not the counterparty. It is one of those things I probably should know in more detail tbh.

That individual if just an employee can presumably then sue the employer (as long as they are comfortable that they have that authority internally)- and you get to where you need to be.  But its an awful way of getting there, so say no, and delete.  If you are a UK company, get a director to sign if they insist. 

Of course you could just point out that they should safisfy themselves as to the authority of the signatory and if in any doubt they are free to not sign.

what an absolute joke.  The person can't be bound personally unless they were actually a party.  And then, what's the consideration?  

Or invite them to obtain a formal opinion on the matter, that way they can sue the opining firm if there is a problem.

Never seen it, don't think it's effective, wouldn't accept it. 

Watteau v Fenwick 

Sh!t clause and I would think unnecessary, as cause of action exists against the signatory for breach of warranty of authority.

IMT - yes but not on an indemnity basis.

Still sounds iffy.

the first half wouldn't be effective anyway, would it, because they company by definition wouldn't be bound by it.

Unless the signatory signs the agreement under a separate execution block in their personal capacity that sounds very flimsy to me 

Kinda rings alarm bells that they think they need this... Surely getting sight of the delegated authority (and the related minutes/resolution) plus the articles should give enough comfort (plus a capacity, due execution and enforcement opinion if high value).

Thanks everyone - you’re confirming what I thought.

Sucks from a moral level in my opinion too!

Heh@serge: hoist by my own retard

The rule in RBS v Turquand would normally cover any counterpart company. So even if the company on your side hasn't delegated authority properly, in most circumstances it will still be bound by the contract. 

Doubt whether the personal liability clause would work for the reasons others give above.

But it does remind me of those horrifying cases where a firm has purported to represent a company in litigation; it has been held that the firm was not effectively instructed (usually because the dispute is about who the real directors are); and the firm has been ordered to pay the costs personally.

Why not just get it sealed if they are worried about the execution?

Spurius - those sound like interesting cases.  Can you point me towards any of them?

LawPerson - I haven't seen a new one in over ten years. And I haven't had to look for the older ones in that time (because if there is any doubt about the ability of those instructing to instruct on behalf of the Company I will get the right indemnities). Should be able to find them in a good Company textbook though.

NB this isn't in support of generally asking for such indemnities. It's different if there is a dispute about who the directors are etc. 

A quick google suggests this line of cases is alive and well:

https://www.legalfutures.co.uk/latest-news/firm-ordered-to-pay-wasted-costs-over-lack-of-authority-to-act

The parties are named there. I'm sure you could find it on BAILII and I'd be surprised if the older cases aren't cited. 

I would start with checking English law applies. Assuming it does as someone said above to be enforceable against the hapless soul required to indemnify it would need to be signed as a deed.  I would make that person an additional party to the contract and have a clause about them and have them as separate signatory too if I were doing this rather silly thing in the first place. Some foreign countries have a public register you can check of authorised signatories which tends to be why people ask for this kind of thing rather than in the Uk Jim orders too much A4 paper without authority but there is ostenible authority to bind the company.

I’ve seen very similar language today from a potential new supplier. Laws of E&W apply. muses in consideration of it being the same supplier