Delegated management and agents.
Although a corporation may be considered a separate legal person, it physically cannot act by itself. There are, therefore, necessarily rules from the corporation statutes and the law of agency that attribute the acts of real people to the corporation, to make contracts, deal with property, commission torts, and so on. First, the board of directors will be typically appointed at the first corporate meeting by whoever the articles of incorporation identify as entitled to elect them. The board is usually given the collective power to direct, manage and represent the corporation. This power (and its limits) is usually delegated to directors by the state's law, or the articles of incorporation. Second, corporation laws frequently set out roles for particular "officers" of the corporation, usually in senior management, on or outside of the board. US labor law views directors and officers as holding contracts of employment, although not for all purposes. If the state law, or the corporation's bylaws are silent, the terms of these contracts will define in further detail the role of the directors and officers. Third, directors and officers of the corporation will usually have the authority to delegate tasks and hire employees for the jobs that need performing. Again, the terms of the employment contracts will shape the express terms on which employees act on behalf of the corporation.
Toward the outside world, the acts of directors, officers and other employees will be binding on the corporation depending on the law of agency and principles of vicarious liability (or respondeat superior). It used to be that the common law recognized constraints on the total capacity of the corporation. If a director or employee acted beyond the purposes or powers of the corporation (ultra vires), any contract would be ex ante void and unenforceable. This rule was abandoned in the earlier 20th century, and today corporations generally have unlimited capacity and purposes. However, not all actions by corporate agents are binding. For instance, in South Sacramento Drayage Co v Campbell Soup Co it was held that a traffic manager who worked for the Campbell Soup Company did not (unsurprisingly) have authority to enter a 15-year exclusive dealing contract for intrastate hauling of tomatoes. Standard principles of commercial agency apply ("apparent authority"). If a reasonable person would not think that an employee (given his or her position and role) has authority to enter a contract, then the corporation cannot be bound. However, corporations can always expressly confer greater authority on officers and employees, and so will be bound if the contracts give express or implied actual authority. The treatment of liability for contracts and other consent-based obligations, however, differs to torts and other wrongs. Here the objective of the law to ensure the internalization of "externalities" or "enterprise risks" is generally seen to cast a wider scope of liability.
