Harper James advises ambitious UK businesses on contractual authority under the laws of England and Wales. The central question is simple: did the person who signed or agreed the contract have power to bind the organisation?
Express actual authority comes from a clear appointment, board resolution, employment contract, delegation or written mandate. Implied actual authority arises from a person’s role and normal responsibilities, such as a procurement director agreeing supplier contracts within an approved budget. Apparent authority concerns what the business represents to the other contracting party. A company that presents an employee as its commercial director can be bound by that person’s agreement, even where internal approval was missing. The company can then pursue an internal remedy against the employee, but that does not automatically release it from the contract.
Remote work, electronic signatures, procurement platforms and AI-assisted contract negotiation have increased the number of people involved in approval chains. Businesses now need clear signing limits, named contract owners, reliable records of board approval and controls over who can accept digital terms. Businesses reviewing these issues can also consult this contractual authority resource for further discussion of approval processes, agency risk and contract execution.
Start with an authority matrix covering contract value, subject matter, territory and risk. State who can negotiate, approve and sign, and identify contracts that always require director or board approval, such as financing, share transactions, major intellectual property licences and long-term exclusivity arrangements. Check the company’s articles of association, board delegations and any shareholder agreement. Keep signed resolutions, powers of attorney and approval emails with the final contract. When authority is uncertain, obtain confirmation before signing or use ratification through the correct corporate process without delay.
Contract reviews should also test whether the counterparty had reason to rely on the signatory’s position, whether the agreement contains a valid execution block, and whether the signatory is acting for the correct legal entity. These checks protect against unauthorised commitments, duplicate approvals and disputes over who agreed what. A senior lawyer can then match the approval process to the business’s risk appetite, from a simple delegated-authority schedule for a start-up to formal contract governance alongside an in-house legal team.