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:
(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
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.
Ballpoint ink no longer is needed to
bind a contract. Today we also are able to enter into contracts
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@example.com.