Law & Legal & Attorney Contract Law

Can Corporations Enter Into Binding Legal Contracts?


    • Corporations are legal entities registered within their requisite states or countries. Corporations have legal privileges and liabilities that are distinct from those who own or manage the corporation. Corporate entities are run by the board of directors and they operate through their corporate officers. Corporations are created by filing incorporating documents with the state and they are dissolved by filing articles of dissolution.


    • The elements of an enforceable contract include: an offer, an acceptance, a meeting of the minds, or mutual assent, consideration and a subject matter that is not contrary to public policy or otherwise illegal. Additionally, a valid contract may require that the parties sign the document to show that they consent to the terms of the agreement.

    Who May Sign

    • Although a signed contract is legally binding on a corporation, it must be signed by an individual on behalf of the corporation. The board of directors of the corporation can grant authority to individuals within the corporation to sign and execute legally binding contracts. In general, most officers of a corporation should have authority to sign a contract on behalf of the corporation.


    • In certain instances, a signature is not required for a legally binding contract. For example, certain oral contracts can be enforced without a written agreement and companies that routinely deal with each other may not require formal contracts if they have operated without formal contracts in their prior dealings. A doctrine of law called the statute of frauds outlines when contracts must be in writing.

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