Over Taylor Biggs

Red Card owned a freehold in South West London, converted into five self-contained flats let on long leases to some directors of the company.  Red Card and the individuals were named as parties in a Contract for Sale.  In 2009 Contracts were exchanged to sell their respective interests in the building to Mr and Mrs Williams for £3.35m. The Williamses alleged that Red Card had not properly executed the Contract.  They therefore tried to extricate themselves from the deal. 

The Contract contained various signatures under the words "Signed.......Seller" at the foot of the document.  This included those (of two) who were authorised to sign on behalf of Red Card and who were also owners of two of the long leases.

The Williamses argued that the valid execution of the document by Red Card required that the document should contain words stating that the signature of the authorised signatory should be "by or on behalf of" Red Card.  They contended that as no such words appeared, the individual signatures were for themselves in respect of their personal interests, rather than that of Red Card. 

The Court of Appeal disagreed and held that the Contract was duly executed by Red Card.

Under the Companies Act 2006, a company does not have to execute a document under a seal.  There are more informal methods.  For example, a document signed instead by two authorised signatories can count as execution by the company under a seal.

The Court concluded the legislation did not require that in addition to the signatures of the individuals, who were authorised signatories of Red Card, there had to be words setting out that these signatures were "by or on behalf of" Red Card.

The fact that the "seller" in the Contract for Sale was defined to include Red Card as well as individual Lease owners and that the signatures of the authorised signatories of Red Card were at the end of the document under the words "Signed.........Seller" meant that the document was expressed to be simultaneously executed, both by Red Card and the individuals in their personal capacity.

The clear advice is that if an individual is signing for himself or herself, and as an authorised signatory of a company, then the individuals should sign twice, with a clear statement as to the different capacities in which the document is being signed.