If it turns out that the contract was poorly signed, it may be unenforceable against the company. The director or representative who signed the contract on behalf of the company may be held personally responsible. They may consider that any person held by the corporation as an agent of the company has been duly appointed and is entitled to exercise the powers and duties normally performed or performed by that type of officer or agent of a similar company (section 129(3)). This assumption is also possible when the agent acts fraudulently in connection with a trade or falsify a document (section 128(3)). If you. B Asking an agent to sign a contract on behalf of your company and you have not read the contract first, you remain responsible for all contractual terms. The client approves the officer`s actions and therefore bears the last responsibility. The agency agreement between a client and the agent must always be written in writing, with clear commercial terms, with explicit language limiting the responsibility of the client, when the representative does something that has not been authorized. This protects you personally and professionally. To demonstrate actual authority, it is necessary to enter into some sort of agreement between the client and the agent, authorizing the agent to enter into a contract on behalf of the principal (as in Hely-Hutchinson/Brayhead  1 QB 549). Section 126 of the Corporations Act 2001 (Cth) specifies that a company`s power to enter into, amend, ratify or adopt a contract may be exercised by a person acting as an agent of the company.
However, to do so, the officer must have authority. It is also common for this power to rest with the directors of the company and the power to act as a representative of the company may be conferred by a decision of the company`s board of directors. Agency agreements can be entered into if you ask a seller, accountant, lawyer or other third party to make transactions on your behalf. The difference between actual authority (implicit or expressed) and purported authority was explained in Freeman – Lockyer v Buckhurst Park Properties (Mangal) Ltd  1 All ER 630. A clear boundary has been drawn between the power created by a consensual agreement (real authority) and the authority created by representation (alleged authority). Although this is an English case, its principles have been applied to Australian cases such as Crabtree-Vickers Pty Limited v. Australia Direct Mail Advertising – Addressing Company Pty Limited (1975) 133 CLR 72.