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In Texas, it does matter how you sign your contracts!!

On Behalf of | Apr 24, 2020 | Business Entities, Contract Law

I continually stress to our business clients that they should always sign any contracts, agreements, purchase orders, change orders, or other written documentation with their company’s signature block and their representative title, if they intend the agreement to be on behalf of their company. In this day of cut and paste, downloading forms and contracts off the web, a lot of clients seem to forget this wise advice.

Now I have a recent Texas Court of Appeals case out of Dallas, which affirms this advice that unless you want to be personally liable and responsible for performing that agreement, you better make sure that you clearly indicate that you are signing that agreement in your representative capacity; i.e. adding your title after your signature.

The 2020 case is styled PMC Chase, LLP v. Branch Structural Sols., Inc., 2020 Tex. App. LEXIS 772. The Dallas Court of Appeals affirmed the lower Court’s judgment which held that PMC’s manager was personally liable for PMC’s breach of its agreement with Branch Structural because when the one-page contract was signed by PMC’s manager, it did not have any notation or representation that PMC’s manager was signing as agent for PMC. The Dallas Court of Appeals cited the general law principle that the law does not presume agency. The Dallas Court held that because the contract only bore the manager’s signature and did not mention PMC or indicate the manager was signing in a representative capacity in any way … it unambiguously showed that it was the obligation of PMC’s manager personally. Since the Court found that the contract was unambiguous, the Court held that its conclusion could not be altered by parol evidence of the parties’ intention, including the parties’ testimony “that they understood [the manager] to have signed the contract for PMC.”

Stay safe and keep in touch,