A general counsel or chief legal officer tends to serve as a company’s foremost attorney. This individual tends to report directly to a company’s chief executive officer. Generally, if a CEO empowers the general counsel job description to negotiate contracts on behalf of the business and/or business owner, the general counsel may do so. Absent this permission, a general counsel is not generally empowered to enter into a contract on behalf of the business or its owner(s). However, the general counsel job description tend to require such permission and it would therefore be strange to withhold it broadly.
Depending on the circumstances surrounding a particular dimension of the company, it may make sense to withhold this permission when applied to a specific element of the business. For example, if a business relationship with another company has recently soured, it may make sense to direct a general counsel to cease entering into contracts with that particular business.
The authority to negotiate and enter into a contract on behalf of a business and/or its owners may be granted by express permission from the CEO, a condition of the general counsel’s job description and a board of directors resolution or the bylaws of the company. As long as documentation supporting the general counsel job description that contract negotiation authority is clear and is granted by those with the authority to provide such permission, a general counsel may proceed accordingly.
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