In terms of our current law, it is assumed that a director of a company has the necessary powers to bind that company, and an agreement signed by one director will accordingly be valid.

Fortunately, in terms of the new Companies Act that will become law shortly, the position remains the same - a third party dealing with a company in good faith may assume that the company in exercising its powers, has complied with the provisions of the Companies Act.

It is however always a good idea to provide in an agreement that the person signing such agreement is duly authorised - it will provide a party to a contract with a right of recourse against such individual as well, if this person did not have the necessary power to bind the company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.