Contracts and Liability on Authority

Contracts and Liability on Authority

It is my belief (and I could be wrong) that a contract is not valid and a company is not liable if the contract was signed by an employee who did not have the authority to enter into a contract with a third party, i.e. a switchboard operator signs a contract for a cleaning service. What law, if any, absolves the company from liability? And, if the third party should have known this employee did not have the authority to represent the company in contract matters, what law absolves the employee of all liability?