Legal Question in Business Law in California

Re: Signing Contracts

A spouse signing the other spouse's name to a contract may or may not be fraudulent depending on the other circumstances. Other questions that must be asked and answered would include the following, in layman's language--

(a) Was the spouse authorized to sign? The authority does not have to be written, or even result from an express understanding between the spouses. It can be inferred from the circumstances, such as where there is a family business in which each participates.

(b) Was the other party fooled? If the other party to the signed agreement knew that wife was signing husband's name (for example) without authority, there is no fraud......or if there is, the other party is maybe a participant in the fraud, not a victim. Also, if the other party didn't know of the deception but with reasonable investigation could have discovered it, there may be no provable fraud.

(c) Was any harm done? No harm, no foul.

(d) Did the harm result from the allegedly fraudulent act? In other words, if husband signs wife's name to a roof-repair contract and the roof leaks, the damage due to the leaky roof is the result of poor workmanship, not the wrong signature on the contract.

In the business world, employees sign the boss's signature all the time. It is not fraudulent because they are operating within express or apparent authority. Similarly, spouses may be the agent of one another. The intent and the result must be examined as well as the act itself to determine whether there is fraud.