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Important Tips for Signing Documents

We are often asked how to correctly sign documents by our clients and we also regularly receive documents that have not been correctly signed. Whilst the technical requirements for executing documents can depend on the type of document (contract, lease, statutory declaration, affidavit, titles office document etc) and the State or Territory which the document relates to there are a number of general points that you should keep in mind when executing a document.

Signing by Individuals

If an individual is signing a document then a witness should witness the individual’s signature. The witness must actually be present when the document is signed by the individual and must sign the same document, rather than a counterpart. The witness should also state their full name and address.

Signing by Companies

A company can sign documents by having them signed by two directors, or a director and a secretary. Both signatories should sign the same document and state their full name and in what capacity they are signing ie as director or company secretary.

If a company has only one director who is also the company secretary, then that director can sign documents on behalf of the company.

When directors sign on behalf of the company then there is no requirement for their signature to be witnessed.

Fixing a company seal to the documents is not necessary. Due to changes in the Corporations Act a company no longer needs to have a company seal.

If a document has been executed as outlined above, then any other party to the document is entitled to assume the document has been properly executed by the company in accordance with section 127 of the Corporations Act.

An individual can sign a contract on behalf of a company if that person:

  • is an authorised representative. To be an authorized representative the company must pass a board resolution authorising them to sign documents. The resolution should set out the limitations on the person’s ability to sign on behalf of the company for example the types of documents that they can sign; or
  • has been granted a power of attorney and the details of that appointment should be contained in the execution clause of the document. It is good practice to also provide a copy of the power of attorney to the other party to the document so that they can see that the document has been executed correctly.

The contract should be dated on the date that the last party to the contract signs it. Parties often forget to date the contract and depending on the nature of the document this can cause issues for the parties later on.

It is open to the parties to a document to agree upon the date (including a past date) from which their legal relationship commenced. They can state expressly in the contract that it has retrospective operation and takes effect from an earlier date.

It is important to note that giving a contract retrospective action is not the same as backdating the document. Backdating a document is not recommended. Contracts should only be given retrospective effect if it is clear that there is no intention to deceive a third party.

Summary 

Care should be taken when signing documents to ensure that they are correctly signed. You should also check that any other party to the document has also signed the document correctly. It is better to ask questions at the time than try and rectify it when it may be too late.

If you require any assistance in relation to signing a document or if you have received a signed document and are unsure whether or not it has been signed properly, please do not hesitate to contact Cormiston Legal on 03 6332 9353.

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