Legal Question in Business Law in Washington

Unauthorized party signing a lease agreement

There are three parties involved: Company A and Company B (owned by the same owner), and Lessor (of equipment).

An employee of Company A signed a lease agreement for equipment with the Lessor, but signed it using Company B's name (without Company B's knowledge or approval).

Company A has gone out of business, and Lessor is claiming Company B is responsible for the lease--even though it was intended for Company A and unauthorized to be entered into as Company B.

Is Company B still on the hook for the lease? Or does it have any grounds to get out of it?


Asked on 4/28/06, 4:33 pm

1 Answer from Attorneys
Matthew King Wershow & Ritter, Inc. P.S.

Re: Unauthorized party signing a lease agreement

Without seeing any documents, Company B is responsible for the lease. The issue is one of agency - if the employee was an apparent agent of company B, meaning that lessor had no reason to believe that the employee was not authorized, then company B is responsible for the lease. Company B can then go after the employee for the unauthorized lease.

Please do not hesitate to contact me if you have any questions, or would like assistance in resolving this matter.

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Answered on 4/28/06, 4:39 pm


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