by Jonathan T. Howe, esq. | January 01, 2008

We talk all the time about contracts: which clauses they should have, which ones you should avoid and how to negotiate them. When all those details are wrapped up, there still are some decisions you should make concerning who will sign the document.

Don’t Be Liable

In signing contracts, you need to limit your potential liability. For example, putting your own name on the agreement can mean you are saying you are a major party to it and thus personally bound by its terms and conditions. Better, always, is to sign any legal document as a representative of your or your client’s organization, unless, of course, you actually are one of the responsible parties.

For example, on behalf of your employer or your client, you can sign as follows:

XYZ Corp.

(your signature here)

As Its Authorized Meeting Professional

Those signing on behalf of vendors should do the same.

Who Can Do It?

Who has the authority to sign and bind the contract you are working on? The laws of agency are very clear that one party cannot have someone else sign on his behalf unless the main party has properly bestowed that right upon the individual. This occurs in a number of ways, but usually it is a written authorization from the main party giving that permission.

However, the law recognizes people, such as meeting planners, can be cloaked with what we call “apparent authority.” That is, by acts or by conduct, the individual signing appears to have the authority to sign the agreement on behalf of another.

Digital Signage

Ballpoint ink no longer is needed to bind a contract. Today we also are able to enter into contracts electronically.

In fact, the paperless contract might not be too far away, thanks to the Federal Electronic Signatures in Global and National Commerce Act (E-SIGN) and the Uni-form Electronic Transactions Act (UETA), both of which have been adopted by most states. These laws state that electronic transactions cannot be challenged merely on the basis that they are executed in an electronic form as opposed to the traditional paper-based means of entering into an agreement.

If you wish to take advantage of this technology, be mindful of the requirements that the law imposes. Both parties must demonstrate their intent to be bound by the terms of the online transaction. Cyberspace requires the demonstration of this by a recognizable intent to enter into the agreement. For example, agreement can be indicated with a click or any other action that clearly signifies acceptance.

The Public Key Cryptography approach to such transactions uses codes or keys to encrypt and decrypt communications, so the identity of the sender and the integrity of the communication can be verified by the recipient of the documents. When using such digital approaches, make sure it is clear when there is an acceptance. Regardless of the system you use, following are some general guidelines.

* Include the terms of the contract in a conspicuous manner along with notice that the transaction in question is governed by such terms.

* Make sure the user is able to review the terms pri-or to entering into the transaction and can download or print the terms for later reference.

* Provide a clear method for the parties to assent to the terms.

Being cautious, however, I still prefer the old-fashioned way to seal a deal -- with ink on paper.

Jonathan T. Howe, Esq.,is a senior partner in the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at [email protected].