Contract approval and signing

Reminder: Appropriate approval should have been obtained prior to undertaking a procurement process. It is better practice for this to be given by the delegate most likely to sign the contract at the conclusion of the process.

The person who signs a contract must have the appropriate authority to do so.

The contract signatory is responsible for entering into a contract agreement or arrangement under which public money will become payable in accordance with the terms of the contract. It is important that the person who signs a contract has the appropriate authority to do so, is fully aware of their responsibilities and is satisfied that all necessary approvals had been obtained and relevant policies have been complied with.39 Identification of the officers who have the necessary authority to enter into contracts to certain financial limits will generally be contained in the acquiring entity's Chief Executive Instructions (or equivalent) or procurement procedures. It is essential that the contract is approved by a person who has the appropriate authority.

It is better practice for the delegate responsible for the contracting process to also actually sign the contract, whenever possible. In some circumstances this may not be possible and in such situations the signatory to the contract needs to make sufficient enquiries, of those that have been involved in earlier stages of fnalising the contract to be satisfied that all necessary matters have been appropriately dealt with.

The order in which parties sign the contract has no bearing on the legal status of the document. It is, nevertheless, better practice for the acquiring entity to request a contractor to sign the contract first as this allows the entity to ensure that the final contract has not been varied in any way from that which was agreed between the parties.

A practice that is sometimes adopted at this stage is for the contract signatories to initial each page of the contract, including all annexures and attachments. There is no legal requirement for this to be done. However, it is important that the final contract is checked carefully for accuracy and consistency and the contract signatories may consider it appropriate to initial each page of the contract as evidence of the contract's completeness. Another practice that is commonly adopted is to bind the contract, thus reducing the risk of inadvertent or deliberate replacement pages being inserted.

It is better practice for the delegate responsible for the contracting process to also actually sign the contract.




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39 For example, those relating to the expenditure of public moneys (FMA Regulations 9, 10 and 13), limiting the contractors' liability and/or entering into indemnity arrangements with the contractor.