Legal Question in Real Estate Law in New York
Principal signatures on a service contract
I recently drafted a Financial Consulting Agreement between myself (a sole proprietor) and a consortium of two Limited Liability Companies. I named all principals within and sent the document for approval, providing signature blocks for all three acknowledge their acceptance of terms. One of the pair of principals (a husband and wife team) in the primary LLC signed off and faxed back my agreement. The husband happens to be a member of both LLC's involved in the contract and explained to me, when questioned about the missing signatures of his wife and his partner from the other LLC, that his signature was sufficient to validate this contract. I believe that I am diluting my contract by accepting only one of the pair of principals in the primary LLC and not having the signature of the second member of the other LLC entity in this deal. What does the law say about this situation?
2 Answers from Attorneys
Re: Principal signatures on a service contract
Each LLC you want to be bound by your contract must sign through its duly authorized person. Generally, it is its Manager or Managing Member. Just because the same persons act as members/managers of several LLCs does not mean that their signatures on behalf of one LLC would make the other LLC liable on the contract. Get a business attorney to review the whole contract and not just the signature page if you want an enforceable agreement to govern your consulting arrangement.
Re: Principal signatures on a service contract
As Atty Frenkel indicated, You need an attorney to immediately review your docs, before deciding how you should proceed.
Suggest that, in the future, you have an attorney draft your business agreements, in advance AND attend or supervise the proper execution of same, to best protect your interests.
Please note that, among other things,
a) Signatures on a business service contract, stipulation or agreement, SHOULD SPECIFY in exactly what "capacity" the SIGNER, is executing the document.
b) A person signing or executing a document or agreement, in ONLY their representative capacity, (to wit: "AS, Pres., Manager, Agent, Authorized Representative, etc.)," generally, is NOT agreeing to be held liable; nor agreeing to be a GUARANTOR, of the company's performance of the agreement.
Essentially, this means that if the "business" does not pay or perform, the individual business owner, partner or signer to the agreement cannot be held personally liable for payment or performance on the contract.
Good luck,
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