How to sign a company contract without incurring personal liability

If you’re an employee of a company, and you sign a company contract as just “John Doe,” you might end up being held personally liable for the company’s obligations. (If you’re the owner of the company as a sole proprietor, or the general partner of a partnership, you probably will be personally liable in any case.)

A better way to sign a company contract is to have the signature block:

• clearly indicate that it’s the company, not you personally, that is agreeing to the contract, and that you’re simply signing on its behalf; and
• stating your title.

The wrong way to sign a company contract

A better way

Further reading

• Protecting the Deal Professional from Personal Liability for Contract-Related Claims, by Glen D. West, of the Weil Gotshal firm.

For a last-minute checklist of things to consider before signing a contract, see my e-book, Signing a Business Contract? A Quick Checklist for Greater Peace of Mind.

See also: (list is automatically generated)

• Signing a business contract? Be sure your company title is in your signature line

Tagged as: Signature