Legal Question in Business Law in California

LLC and purchase agreements

If a purchase agreement is signed by a sole proprietor over to an LLC and the person who signs the agreement isn't named on the LLC, is the purchase agreement in fact valid. No $ changed hands in the transfer.


Asked on 12/16/08, 4:06 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: LLC and purchase agreements

Your question lacks sufficient facts to give a reliable answer.

The general rule is that an agreement must be signed by, or on behalf of, the person or entity against whom or which it is to be enforced.

There is also a rule that the person or entity seeking to enforce the agreement must have given the other party a "valuable consideration."

Just because a person signing a contract on behalf of an LLC is not listed as a member of the LLC is not necessarily fatal to enforcement of the agreement against the LLC. LLCs, like corporations, can use managers, officers, agents, etc. to sign on behalf of the entity. The issue is whether the person who signed was duly authorized, or let the other party to believe that he was authorized.

So, evaluating the validity of the contract or supposed contract you're asking about requires a lot more facts.

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Answered on 12/16/08, 5:11 pm


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