The RISK of loss that occurs when an employee or AGENT of a company commits the firm to a legally binding, but unauthorized, transaction; in most instances the firm will be required to perform as contracted. A subcategory of PROCESS RISK.
More On This Topic
Link to This Definition
Did you find this definition of AUTHORIZATION RISK helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary