What is the position with parties signing Deeds of Sale in a representative
capacity/on behalf on another person or entity?

I n terms of section 2(1) of the Alienation of Land Act No 68 of 1981, no
 alienation of land shall be of any force or effect unless it is contained
 in a deed of alienation signed by the parties thereto or by their agents
acting on their written authority. Therefore, where someone is signing on
 behalf of someone else, he must be authorised in writing to perform that
act. For example by a Power of Attorney, either General or Special.

Where either the seller or purchaser is a company, trust, close corporation
 or some other legal entity, then estate agents should be careful to establish
 that the person entering into the sale agreement has been validly authorised
 to do so. Most agreements of sale have a clause in terms whereof the seller/
purchaser warrants his authority to act. It would however be a good idea for
the seller/purchaser to write after his signature, "Who warrants that he is
duly authorised to bind the Co/CC/Trust hereto." -A belts and braces approach.

If no inquiries were made as to the other contracting party's authority to bind
 the entity and there was no warranty clause included in the deed of sale, then
 the other directors/members/trustees of that entity could challenge the validity
 of the contract, if desired. The other contracting party is however protected in
 a case where the person signing in the representative capacity lied about his
authority when queried thereon. It is important therefore for the question to be
 asked and then recorded as to whether that person is authorised to enter into
the contract or not. It must not just be assumed.

As the transferring attorneys, we make sure that we get a Resolution signed by
all directors, members, trustees etc ratifying and approving the sale. It is
 the period between the date of sale and the date we get the above resolution
 signed that is vulnerable for either party and yourselves as the agents.

For further information or to book a consultation contact us on:

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Website    http://www.louwrenskoen.co.za

Park street Law Chambers
Park Street 755
Arcadia
Pretoria
Gauteng
0001
South-Africa