In a case-law decision of 15 February 2021, the Hungarian Supreme Court dealt with the power of representation delegated by a person authorised to represent the company jointly.
The case-law decision explained that, as a general rule, in case of co-signing, a contract is concluded by the joint signature of the persons authorised to sign jointly in the commercial register. However, one of the directors with joint power of representation may give a power of attorney to the other or both of them can jointly mandate a third person to sign the contract. It is, of course, not allowed for one of the co-signatories to authorise a third person to sign the contract individually.
Although the case-law decision took a position on the issue in relation to a credit institution subject to the Law on Credit Institutions and Financial Undertakings, the same principle applies and the decision is applicable to any other legal person.
We would like to point out that a contract signed by proxy is valid and binds the legal entity represented but, even though he did not sign the contract in person, the director registered in the commercial register remains liable to the company provided that the proxy has not exceeded their power of attorney.