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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3653
Experience:  Solicitors 2 years plus PQE
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If a contract has been signed and updated by Financial director

Customer Question

If a contract has been signed and updated by Financial director (3 times as service changes), and then a further contract is signed unbeknown to the director by a warehouse manager, can that contract be enforced as they are not an officer of the company or does the previous FD signed contract hold?
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Technically any one that is given authority by the company can sign on behalf of the company. If the warehouse manager was never given authority to sign then we have to look at the rules of "Ostensible Authority". Did the other party have an objective and reasonable belief that the warehouse manager had authority to sign on behalf of the company? If the answer is no then the contract should not stand.

That said what were the previous dealings between the parties? Was it always the FD that signed document?

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 3 years ago.


The original contract (for waste removal) was set up by FD(myself) and updated on several occasions by the FD. Dates as follows.


5-4-12


10-7-12


28-11-12


01-02-13


FD was put as contact name on contract.


 


However FD not contacted and new contract signed18-2-14 by warehouse manager.


It is possible other party thought he had authority to sign.


Warehouse manager also thought he was simply signing a change to service, i.e 3 bins to 4 bins, but instead it was a legal contract which also incorporated a hefty rate increase. This was not explained to him by the sales field agent.


 


Furthermore, the orginal agreed rate dating back to late 2012 has not been charged correctly so I certainly want that re-crediting too.


 


I believe the latest contract should not be enforceable and I should be free to


1) Serve termination notice period


2) Reclaim overcharged rate


 


I am concerned that during the 3 month notice period that the rate that is being charged is not agreed.

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

Are you saying that the FD signed off the original contract and each contract amendment?

It was only the last contract amendment that was sent to the Warehouse manager?

Was the FD aware that negotiations were taking place for this latest amendment?

Kind regards

AJ
Customer: replied 3 years ago.


Hi Alex,


 


Just so there is no confusion, I am the FD.


I personally signed 4 contracts, and only on the last occasion was the new contract sent to warehouse manager.


I was not aware negotiations were taking place for this. The warehouse manager also was not aware they were signing a legal contract, he simply thought, it was a document to say they needed 4 bins collected weekly instead of the 3.


 


Regards


 


Craig

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

I find it conceptually difficult to accept that the company can be bound by the signature of an individual that has never before signed a document on behalf of the company in relation to this client.

On the face of it the client would be hard pressed to argue that the warehouse manager ever had the ostensible authority to sign this contract on behalf of the company if he had never signed anything before and you as FD had always signed on behalf of the company.

I think that would be good grounds to argue the company is not bound by this contract. The only issue you would then have is if since signing the company behaved in such a way as to accept that it was in fact bound by the contract - for example complied with its terms.

I look forward to hearing from you.

Kind regards

AJ