Signing authority

The Jolly Contrarian’s Glossary The snippy guide to financial services lingo.™ →Go uptown The corporate secretarial unit, yesterday Index — Click the ᐅ to expand: Glossary Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Once the shooting, and the shouting, is over, there is the delicate business of putting pen to paper, so the contracts so tortuously wrangled over can be scanned, circulated, copied, digitised, OCRed, metadata extracted, catalogued, logged filed and archived do they can be locked away in deep storage never to be looked at again.

Part of that process is to validate that the signatures appended to the document on your counterparty’s behalf belong to people suitably authorised by your counterparty to put them there. It seems mundane, but the ritual has its roots in deep philosophical magic. This is the commercial Eucharist: the transubstantiation of the disembodied corporate spirit through mortal hands, to binding contractual covenant.

Consequently, there is a metaphysical oubliette down one can drop if one is so disposed, but few negotiators are that brass-necked. The memories of dreary company law lectures about veils, fictional personalities and immaterial bundles of rights are still raw.

As a result, this mostly presents as a ditchwater-dull process of chasing down pre-prepared certificates of incumbency prepared by corporate secretarial units — handed off to contractors in Sofia who've never had to sit through company law lectures — but on a slow day there is enough here for an under-occupied legal eagle to have a little fun.

For example, could I see the incumbency certificate of the person who who issued the signatory’s incumbency certificate? Clearly, there is a potentially infinite regression right there, with only two endpoints, both of which present fertile ground for more confusion.

One, the chain can loop back on itself, meaning the present signatory is validating the certificate of someone validating hers.

Two, the chain can run into someone who certifying a certifier, who no longer works at the organisation.

Where contracts are subject to formal execution requirements , chances for confusion multiply. Was out sealed? Was it delivered? Was it witnessed? By whom? Did anyone witness the witness witnessing the witness?