If authority is questioned and there is uncertainty, should a contract be signed?

• A. Sign the contract to establish authority.
• B. Sign now and provide proof later.
• C. Authority is assumed; signing is optional.
• D. A contract should not be signed until proof of authority is presented.

Answer: (D)

When a signer’s authority to bind another party is in doubt, the safest move is to require proof of that authority before signing. In contract practice, the person signing on behalf of a company or organization must have either actual authority (explicit permission to sign) or apparent authority (the agreement with the signer’s role leads others to reasonably believe they can sign). If authority is questioned, signing without proof can expose the principal to unauthorized commitments, create enforceability problems, and potentially saddle the signer with personal liability or disputes over who is actually bound.

Requiring proof of authority protects everyone involved: the party relying on the contract can be confident they’re dealing with someone authorized to bind the entity, and the signer or their organization can avoid later challenges about who had the right to sign. Proof can take the form of a corporate resolution, a written authorization, a power of attorney, or a similar official document that identifies who may sign and on what scope.

In this scenario, the prudent course is to withhold signing until such proof is presented. Once proper authority is verified, signing can proceed with clarity and reduce the risk of disputes down the line.