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Company
Series
Contracting
with a company
by
Goh Hoon Huar
Can
a company enter into a contract?
The
Companies Act confers a legal entity on a company and the capacity to
enter into contract. The company's power to enter into contract and the
manner of doing so are further spelt out in the company's memorandum and
articles of association. However, a company requires human beings to
undergo a series of actions to enter into a contract in the name of the
company.
Can
a company be bound by an oral agreement?
Section
35(4)(c) of the Companies Act allows an authorised person of a company to
enter into oral contract.
How
does a company execute a written contract?
There
are two ways a company can execute a contract:
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by
affixing its common seal on the contract in the presence of a director
and countersigned by the company secretary or a second director, or
-
by
the signature of a human being authorised by the board of directors or
the articles of association to enter into such contract.
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Are
all contracts under the seal of the company binding on the company?
Not
necessary. Where the transaction and the use of the common seal are not
authorised by the company, the company is not bound by the contract.
How
does a contracting party ensure that a sealed contract is binding on a
contracting company?
The
contracting party can request to be furnished with a certified copy
of a directors' resolution of the contracting company which should show
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