Humber/Ontario Real Estate Course 3 Exam Practice

What should a salesperson ensure when a corporation signs a purchase agreement?

1. A senior manager can sign without further authority

2. A registrant confirms the authority of the signing officer

3. The corporate seal is always used

4. Use of the corporate seal is optional but preferred

5. The signing officer must be a board member

6. The corporate seal must be impressed on the document

The correct answer is: A registrant confirms the authority of the signing officer

When a corporation enters into a purchase agreement, it is essential for the salesperson to confirm the authority of the officer signing the agreement. This verification is crucial because corporate signatories can vary based on their position and the internal governance documents of the corporation. By ensuring the signing officer has the necessary authority, the salesperson protects both the interests of the buyer and the integrity of the contract. If the signing officer does not have the proper authority, it may invalidate the agreement, creating legal issues for all parties involved. In this context, the focus is on the proper checking of the authority behind the signature rather than other elements, such as whether a corporate seal is used, the necessity of the signing officer being a board member, or the particulars regarding senior management's authority to sign. These details can provide additional context but do not override the fundamental importance of ensuring the signing individual is recognized as having the authority to bind the corporation in a legal agreement.