Who Should Sign a Construction Contract? The Authorized Signer Question Nobody Talks About.

Who signs a construction contract is a scenario that plays out more often than the construction industry likes to admit.

A project manager signs a $280,000 construction contract on behalf of a small business. The work gets done. Then comes a dispute — maybe the finish work is substandard, maybe the contractor is claiming extras that weren’t authorized. The business tries to push back.

The contractor’s attorney asks one question: Was the person who signed this contract actually authorized to bind the company?

If the answer is no — or even “it’s complicated” — the business just lost significant leverage. In some cases, the contract itself becomes unenforceable.

This is the authorized signer problem. It’s not the section people read carefully. It’s unglamorous. And it quietly undermines more contracts than almost any other single issue.

What Is an Authorized Signer?

An authorized signer is a person who has the legal authority to enter into a binding agreement on behalf of an individual or entity. When you sign a contract, you’re making a legally enforceable promise. The question is: do you actually have the right to make that promise?

For individual homeowners, this is usually straightforward. You own the property. You sign. Done.

For everyone else — LLCs, corporations, partnerships, trusts, family-owned businesses — it gets more complicated fast.

Why Choosing Who Signs a Construction Contract Gets Complicated

LLCs and corporations

Most business entities have operating agreements, bylaws, or resolutions that specify who can sign contracts — and sometimes up to what dollar amount. A manager authorized to sign a $50,000 contract may not be authorized to sign a $500,000 one. It depends entirely on what the formation documents say. Don’t assume the title on someone’s business card settles it.

Properties held in trust

This is a big one for homeowners in Hawaii and California, where property held in a revocable living trust is common. The trust is the legal owner of the property — not you personally. If you sign a construction contract as an individual, but the property is titled in the name of your trust, you may not be the right signatory. The trustee signs. And if you are the trustee, you sign in that capacity — not as yourself.

Joint ownership

If a property is owned jointly, both owners may need to sign — especially if the work involves a lien, financing, or anything that could affect title. One signature might not be enough to bind both parties.

Startups and small businesses

Early-stage businesses are especially vulnerable here. Roles shift. Titles get handed out informally. Someone acts like they’re in charge without the paperwork to back it up. A signed contract from an unauthorized employee isn’t automatically void — but it creates exactly the kind of ambiguity that lawyers get paid to argue about.

A Real-World Example: The Trust Problem

A retired couple hired a contractor to renovate their kitchen. They’d owned the house for 30 years — but a decade earlier, their estate attorney had transferred the property into a family living trust.

The wife signed the construction contract as an individual. Construction started. Midway through, a dispute arose over custom cabinetry. When the contractor filed a mechanics lien, it went against the couple personally — not the trust.

Sorting out the lien, the title, and the contract authority took four months and cost nearly $8,000 in legal fees. The cabinetry dispute itself settled for $3,200.

The fix would have taken five minutes at the contract table: sign as trustee of the family trust.

What the Contract Should Say

The parties and authority section of a well-written construction contract does three things:

• Identifies the contracting parties by their full legal names — including entity type (LLC, Trust, Corporation)
• Confirms that the individual signing has authority to bind that entity
• Specifies the capacity in which they’re signing — for example: “Jane Smith, as Trustee of the Smith Family Trust”

Some contracts include a representation — a statement where the signer affirms they have authority. That’s worth keeping. It doesn’t prevent bad actors, but it creates a clear record of what was represented at signing.

On the contractor side, ask the same questions. Who are you actually contracting with — the individual, the LLC, or the corporation? Is the person handing you the pen authorized to sign?

How to Confirm Authority Before You Sign

For your own entity

Pull out your operating agreement, trust document, or corporate bylaws. Look for the section on contract authority. If the dollar amount of the contract exceeds any stated threshold — or if it’s simply not clear — get a corporate resolution or trustee certification before signing. Your attorney can prepare one in an hour.

For the contractor’s entity

Ask to see their business license. The name on the license should match the name on the contract. If it doesn’t, ask why. A contractor operating under a DBA (doing business as) should have that documented. If they’re signing as an LLC, make sure the person signing is actually a manager or member with authority — not just an employee with an impressive title.

For trust-held properties

Ask your estate attorney for a certificate of trust — a summary document that confirms the trustee’s authority without revealing the full contents of your trust. Contractors and title companies accept these routinely. It removes the ambiguity entirely.

Red Flags to Watch For

• The contract identifies the owner as an individual, but the property is held in a trust or LLC
• The contractor signs with a name that doesn’t match their license or business registration
• No title or capacity is listed next to the signature line — just a name
• You’re asked to sign on behalf of a business entity and haven’t confirmed your authority to do so
• The contractor is a sole proprietor but the contract names their LLC — or vice versa

Who Signs a Construction Contract – The Takeaway

Authorized signers are one of those contract details that feels like paperwork bureaucracy — right up until it matters. Then it matters a lot.

The fix is simple. Before any contract gets signed, spend five minutes confirming that the right person is signing in the right capacity for the right entity. Do it on your side. Verify it on the contractor’s side.

A construction project is a significant financial commitment. The signature line deserves as much attention as the price.

Previous in the series: What Should Be in a Construction Contract? Start Here. 

Up next in the series: Construction Scope of Work — The Most Abused Section in Any Contract.

This post is part of the Before You Sign series — a nine-part guide to construction contracts for homeowners, startups, and small businesses. See the full series.