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August 2010
Be Careful How You Sign
By Robert Norris

     As a company in Washington state discovered, how you sign a contract and how the contract refers to you is extremely important. The company in this case had assumed a lease in connection with the purchase of a business. The contract referred to the company as “William and Teresa Grover as individuals, dba Grover International, LLC.” The signature line of the contract read “Grover International, LLC by William Grover member.”

     The signature line was correct. However, the reference to the Grovers in the contract instead of only referencing “Grover International, LLC” caused the Grovers problems. The Washington state Court of Appeals held that William and Teresa Grover were individually liable on the contract as well as their company, Grover International, LLC.

     The lesson here is to be certain that your contracts are consistent and that you only do business with your entity’s name, not your own. Otherwise, you could be putting all of your (and maybe your spouse’s) assets at risk.

     Content provided by Wishart, Norris, Henninger & Pittman, P.A., which partners with owners of closely-held businesses to provide comprehensive legal services in all areas of business, tax, estate planning, succession planning, purchases and sales of businesses, real estate, family law, and litigation. For more information, please call Robert Norris at 704-364-0010 or visit www.wnhplaw.com.

Robert Norris is managing partner at Wishart, Norris, Henninger & Pittman, P.A.
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