HOW-TO-ACT-IF-YOU-ARE-GOING-TO-SIGN-A-CONTRACT-AND-THE-OTHER-PARTY-IS-A-REPRESENTATIVE

Companies are represented by their directors, who are the ones who can assume obligations on their behalf. Therefore, anyone who does not hold this position will need to have a power of attorney granting sufficient powers to act on behalf of the company.

Therefore, if after agreeing to sign a service contract as a provider and requesting the data from your client to draft it, you are provided with a power of attorney, you must check the following:

• Registration. That the power of attorney is registered in the Mercantile Registry, which you can verify by checking if there are registry seals indicating the date and entry (this registration is only mandatory for “general powers” and not for “special powers” – that is, those granted to carry out a specific act).
• Validity. That the power of attorney has not been revoked. To do this, request to be shown an informative note from the Mercantile Registry showing the authorization. In the case of a special power of attorney, even if the power has been revoked, the signed contract would be valid as long as you were unaware of the revocation at the time of signing.
• Powers and limits. Look for the authority corresponding to the act (in this case, contracting with suppliers). If it is a general power, check if there are any limits (for example, in the price). However, if the power is limited to a specific activity (for example, signing contracts with payroll service providers) and the services to be provided are different, the power will not be sufficient.

After verifying the above, see what is required in your specific case. For example, if you are going to sign a five-year contract worth 50, 000 euros, you must consider these two limitations. That is, the representative must be able to sign, at least, up to 50, 000 euros per transaction, in addition to being able to bind the company for at least five years (or without a time limit).

Our professionals will help you verify if the person acting as a representative is duly authorized for the contract of the specific characteristics you want to sign.