I signed a contract with 'Bob' who was a General Manager in a company I supplied goods to. When I chased up an unpaid invoice I was put through to the accounts payable department. They told me that Bob had recently been fired, that they had no knowledge of the goods I had supplied and that the company had not given Bob authority to sign any contracts so my contract was not valid. How can I resolve this and get paid?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Dilani Mudalige, Yokine 6060 WA
- Generally companies enter into contracts by having two directors or a director and the company secretary both sign the contract. If the company only has one director who is also the company secretary then that director can enter into contracts on behalf of the company.
- It may not be practical to have directors sign all the contracts a company enters into and for this reason some companies allow authorised employees to sign contracts on behalf of the company. This is usually done by the company’s board of directors passing a resolution to this effect.
- An outside person dealing with the company is not expected to inquire into the inner workings of the company. You are entitled to assume that an employee in a position of authority has been allowed to sign contracts on behalf of the company unless there are circumstances to indicate that this is not the case.
- To start with you can provide the company with a copy of the contract, along with any other documents such as a Purchase Order, confirmation of delivery and any relevant email correspondence between you and Bob and request that they pay your invoice.
- If they still refuse to pay you should have a lawyer assess your situation by going through your contract and other documents and then contact the company on your behalf.
- A lawyer specialising in contract law may be able to assist you in reviewing the contract and any associated documentation.