Legal Question in Business Law in Indiana

Unauthorized signing of contract

An employee of a company signed a ten year contract for advertising. This employee has no authority to sign any contracts. Is the company liable for this contract?


Asked on 3/03/05, 8:36 am

1 Answer from Attorneys

John Bator Bator Redman & Shive

Re: Unauthorized signing of contract

If the person was acting on behalf of the company, that is he represented that he had the authority to bind the company (check the document it probably contains a representation or warranty that he does, then the burden would shift to the company to show that it wasn't reasonable for the advertising company to rely on those representations. There is some risk that a court will rule in their favor but without more facts and a look at the contract, it's difficult to fully assess that risk.

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Answered on 3/03/05, 10:33 am


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