Vendor Relations - Contracts
DebbieW
13 Posts
Does anyone have a policy regarding who can sign vendor contracts for their company. I would like to create a policy so that there is no misunderstanding about who is authorized to sign contracts.
Comments
Where to start.....if your company is incorporated, start with your Board of Directors. The BOD would adopt a document entitled "Enabling Resolutions" which basically states "titles" of those that can bind the company in the sale of products or purchasing of raw materials, etc. Generally the Pres. and COO are the two main individuals with "direct" authority to bind the company. After that, you consider "apparent" and "implied" authority based upon the position of the person and the department. For instance, the head housekeeper would not have either apparent or implied authority to sign a contract purchasing products or services needed by groundskeeping. So those with actual authority need to create a document "delegating authority" to individuals most appropriate to sign contracts on behalf of the company and specifically listing the limits for each transaction.
Hope this helps.