53 Signature Block
Rachael Samberg
Desired Result
You may be wondering why the “Signature Block” deserves a special chapter, when there’s seemingly not much to it. “Put a line in the document for each of the parties to sign.”
For the most part, that’s correct. United States law does not impose a lot of formalities for how the written agreement should be signed by the parties, and many forms of signature will suffice.[1] Electronic signatures are perfectly enforceable. Nor does any particular portion of the document need to be signed for the agreement to be enforced. However, the content of the signature block can affect a party’s liability, and that of the individual signing on its behalf. So for these reasons, there are basic good practices to follow and one common pitfall to avoid.
The Basics
Both parties should sign the agreement. You will occasionally encounter vendor-provided contracts that have no signature block, or that only ask the Licensee to sign. The basic function of the signature is as evidence that both legal entities agree to be bound by the terms of the contract. Lack of a signature on a contract could be used as evidence that a mutual agreement was never achieved, and you always want both parties to sign to avoid that complication. For the same reason, the version of the contract that you save for your records should always be the fully executed copy, signed by both parties (note that this may imply a necessary workflow step for chasing countersignatures).
Include the name of the contracting party in the signature block to indicate the contracting party’s intent to sign and be bound by the contract. You should ensure that the name of the party used in the signature block matches the name of that party as it appears or is defined in the agreement. (Failure to match the names could affect contractual enforcement.) It can also be a good practice to include “by,” “for,” or “on behalf of” if you are signing on behalf of your institution, so that it is more clear you are not signing as an individual—with an intention to be personally bound by the agreement—but rather as an agent on behalf of your institution, which is the actual party being bound.
Common Pitfall
The most common issue you’ll face with signature blocks is determining who at your institution actually has authority to bind the institution contractually. Underlying this is a question of agency law: If the “principal” to the agreement—the legal entity being bound by the agreement—is the university, then either “the university” needs to sign as itself, or an “agent” needs to sign on behalf of the university. To be an agent of the university, you must have authority recognized as such. If you are signing an agreement without such authority, in some cases the contract could be unenforceable or voidable, and you could even be liable in your personal capacity for any breaches. Institutions typically have strict guidelines about who may sign on their behalf, and it is essential to determine and adhere to these in advance.
What it means
The assent of all parties is essential to both formation and enforcement of agreements. Typically, a party manifests its assent by signing an agreement. A signed contract creates a strong presumption that the party has assented to the contract’s terms.[2]
Parties can be bound by agreements when signed by themselves, or when signed by their agents—i.e. representatives—authorized to act on their behalves.[3] In these cases, an agent is said to act on behalf of a principal. The principal becomes bound by the agreement, and the agent does not. An agent should be cautious, however, as they can inadvertently become personally liable under an agreement where it is not clear that the agent was signing merely in a representative capacity.[4]
Where someone purports to act as an agent to bind a principal to an agreement, the effectiveness of that binding can fall within three scenarios[5]:
- Agent with authority: The signing party is an authorized agent of the principal, and has actual authority to bind the principal to the contract at issue. The principal therefore becomes bound by the agreement signed by such an agent.
- Agent without authority: The signing party is an authorized agent of the principal, but does not have actual authority to bind the principal to the contract at issue. However the principal can still be liable anyway to avoid a harmful result to another party that had reasonably relied on the signing agent’s ostensible authority.[6] Moreover, failure to discharge an agent acting beyond the scope of their agency may be seen as an act of contractual “ratification” by the principal.
- Not an agent, no authority: The signing party is not an authorized agent of the principal, and does not have authority to bind the principal to the contract at issue. In these cases the principal does not become bound or liable on the unauthorized contract, and the signing party may in some cases become personally bound by the agreement instead.
Desired Language
[FROM CDL MODEL LICENSE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement by their respective, duly authorized representatives as of the date first above written.
LICENSOR:
BY: ______________________________________ DATE:_________________
Signature of Authorized Signatory of Publisher
Print Name:
Title:
Address:
Telephone No.:
E-mail:
LICENSEE:
BY: _______________________________________ DATE:________________
Signature of Authorized Signatory of Licensee
[NAME]
Tricks & Traps
Institutions typically have stringent rules regarding which employees have authority to sign agreements on behalf of the institution. More importantly, institutions can refuse to enforce agreements that were signed by individuals acting beyond their authority.
EXAMPLE: University of California, Berkeley
For instance, at the University of California, Berkeley, the university imposes robust rules and protocols for all agreements between the University and third parties, and even more stringently so for those agreements that obligate the University to provide a service to a third party. Nearly all such agreements must be both prepared and authorized by a specialized campus entity. And the institution reserves the right not to defend individuals for agreements that they lacked agency to sign.
We are fortunate within the Library that the University Librarian does have what’s called “delegated authority” (from the Chancellor) to enter into some types of agreements pertinent to eResource licensing. Pursuant to this delegation of authority, the University Librarian can enter into eResources contracts only if they involve standard terms for purchasing collection materials—and provided that those agreements do not also bind the Library to provide services to a third party. However, the delegated authority memorandum is from 1988 (and has been renewed in its original form periodically), so it uses the term “purchase” rather than “license.” The Library has worked with campus to confirm that they interpret the delegated authority to extend to collection licenses in the same manner as purchases.
The other problem with the delegation of purchase authority is that, when the UC Berkeley chancellor then redelegated it to the University Librarian, the redelegation imposes the restriction of using “standard” purchasing terms or forms. However, this addition of the “standard purchase order” or “standard terms and conditions” is itself problematic because: Each license varies entirely by licensor. Licensors hold market power, and typically will not consider alternative agreement templates. So, even assuming the delegation can extend to licenses in addition to purchases, how should we deal with its confinement to standard terms?!
We have worked with campus to confirm that they consider “standard terms” as being consistent with the language or effect of California Digital Library’s Model License Agreement. As long as we can negotiate eResources agreements that conform to the essential provisions of the CDL Model License, we do not need to obtain counsel review before signature by the University Librarian.
The point of all of this is to highlight that it is essential to sure up whatever signing authority your department or library actually has, because your institution may not actually be liable for agreements you’ve entered into beyond your authority. And in these situations—albeit hopefully rare—the signing agent could be the one on the hook for damages.
An additional trap can be avoided by establishing a robust workflow for getting the signature of the other party and maintaining good recordkeeping practices around your license documents. If you need to enforce your rights under the contract, you do not want to be hampered by also having to establish that the partially signed copy in your records was actually agreed to by the other party. Always ensure that the other party has signed prior to paying the invoice, and make sure your license records include the mutually signed document.
Importance and Risk
It’s best to develop a good relationship with your office of general counsel and confirm that your licensing processes—and your authority to sign agreements—is recognized and vetted. This can save you a world of trouble down the road in the event of any breach.
