A contract signed by someone without authority may still bind the entity, and one signed by someone with a title may not.

Actual authority comes from the governing documents, a board resolution, or a delegation. Express authority is stated; implied actual authority covers what is reasonably necessary to carry out the express grant.

Apparent authority arises from the principal’s manifestations to the third party — a title, a course of dealing, prior transactions honored. It is created by the principal’s conduct, not by the agent’s claims about their own authority, which is the distinction that decides most cases.

Inherent authority and ratification. Acceptance of benefits with knowledge of the transaction can ratify an unauthorized act.

Titles. A president or chief executive generally has apparent authority for ordinary course transactions; extraordinary transactions — sale of substantially all assets, guaranties of another’s debt, encumbering the business — are outside it, and a counterparty relying on a title alone bears the risk.

The practical solution. For any significant transaction, obtain a secretary’s certificate attaching the authorizing resolutions and certifying incumbency, and an opinion or representation of due authorization in the agreement itself.

Internal control. A written signature authority matrix by dollar threshold and transaction type, communicated and enforced.