Representative: Overview, definition and example
What is a representative?
A representative in a business contract is someone authorized to act on behalf of a company or individual. They might handle negotiations, sign agreements, or manage tasks within the scope of their authority. Representatives can include employees, agents, or third-party professionals like lawyers or consultants.
Why is a representative important?
Representatives are important because they allow companies to delegate responsibilities and maintain efficiency. By clearly identifying who can act on a party’s behalf, contracts ensure smooth communication and decision-making. This avoids confusion about authority and helps prevent unauthorized actions that could lead to legal disputes.
In many agreements, naming a representative ensures there’s a clear point of contact for managing the contract’s terms and responsibilities.
Understanding representatives through an example
Imagine a supplier signs a distribution contract with a retailer. The contract names a "Key Account Manager" as the supplier’s representative. This person is responsible for handling orders, addressing complaints, and negotiating renewals. All communication about the contract goes through this representative, ensuring clarity and accountability.
In another example, a company may hire a legal representative to negotiate and sign a service agreement on their behalf. The representative's authority is limited to this specific task, ensuring the company remains protected.
An example of a representative clause
“Each party shall appoint a Representative to oversee the implementation of this Agreement. The Representative shall have the authority to make decisions necessary for the day-to-day performance of the Agreement but shall not have the authority to amend or terminate the Agreement without prior written consent from their appointing party.”
Conclusion
A representative acts as the authorized voice or decision-maker for a party in a contract. By clearly defining their role and authority, businesses can streamline operations, improve communication, and minimize misunderstandings. Appointing and naming representatives ensures accountability and clarity in managing contractual responsibilities.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.