A company must be very careful with such authority, as it would be held responsible for contracts that were also signed by agents with alleged apparent authority. This is true even if it has been established that the agent acted beyond or beyond his instructions, or gave no power to the business as long as the other party had “reasonably believed” that the agent was entitled to sign on behalf of the company. The belief must show that it “can be traced back to the manifestations of the client” or if “a client, by his words or conduct, gives the reasonable impression to a third party that the officer is entitled to perform certain acts in his name” (High Court decision in Playboy Enterprises International, Inc/Zillion Sdn Bhd – Anor [2011] 2 MLJ 59). Section 126 of the Corporations Act 2001 (Cth) specifies that a company`s power to enter into, amend, ratify or adopt a contract may be exercised by a person acting as an agent of the company. However, to do so, the officer must have authority. The defendant could consider that [the undersigned director] had the authority to enter into the contracts on behalf of the applicant, as it did. The defendant was also allowed to infer from the position of undersigned director, Chief Executive Officer, that it deserved such a power. There is no evidence that [she] did not have the authority to execute either of the two contracts… Simultaneous documents show that the two directors of the complainant company were aware of the contracts at the time; Both did not want to suggest that the contracts should not have been concluded by [the undersigned director] … The defendant relied on the contracts on her face to be executed by a person acting with the express or implied authority of the company, as confirmed by concurrent documents. The parties who can sign a contract for a company are those who have been given the power to represent their company when negotiating the contract. Read 3 min In most cases, the third party would have had such an impression of the behaviour of the person acting on behalf of the company, either by its role and scope, or by its position in society.