Let’s seal the deal or the court’s position on forging the signature

No businessman can be sure that he will never face the indecent behaviour of his partners. One of the forms of such behaviour could be an attempt of your counterparty to avoid his obligations under the ground that the contract was signed either by a non-authorized person or a signature on a contract was being forged.

Most likely, the case will fall before the court.

In case the contract was signed by two natural persons, the court will commission handwriting expertise and, based on the results, will decide whether the signature on the contract was indeed forged. If yes, the contract will be ruled invalid.

But if the contract was entered between companies or with the sole trader as a party, the situation is not that straightforward.

The court will take into account whether the contract was being sealed. By the way, according to the effective laws of Ukraine, there is no demand in sealing the deal, but as we will see further, the seal might be the most crucial argument in proving the presence of business relations.

Position of the Supreme Court.

The court has ruled against the plaintiff who was arguing that the contract was signed by a not authorized person (Director). The court has ruled that since the contract was sealed by the plaintiff, it allows establishing that fact that the signing party was dully authorized, and since the plaintiff did not make any attempts to report the loss of the seal, it proves that he was willing and consented to enter the business relations under that particular contract.

In another case, the court has ruled against the plaintiff, who was arguing that the contract is invalid despite the fact that the contract was sealed as due to the handwriting expertise, the Director did not put his signature under the contract. Someone else did. But the court ruled that a seal allows to identify a singing party, and since no one has reported the loss of a seal, the plaintiff shall dully carry his obligations under the contract.

On top of that, it was also ruled that if the contract was signed by a not authorized person, the shareholder or participant must act in such a particular way that would show his clear unwillingness to obligations under the contract. The owner of the company in that particular case has done nothing.

To sum up, even though using a seal in Ukraine is not mandatory anymore, it sometimes put some light on complicated business relations that occur from time to time.

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