Failure to Put “Manager” Under a Signature Block Results in Personal Liability of Nearly $500,000 Dollar Debt

The Dallas Court of Appeals recently affirmed the trial court’s judgment to uphold a $492,664.42 debt against the individual, Jay LaFrance, where he signed a loan for Ecofriendly Water Co., LLC (EFW) but failed to note he was signing as the agent for EFW.

Plaintiff Thomas Lowery agreed to loan EFW $350,000.00.  However, LaFrance signed his name on the agreement’s signature line labeled “Borrower’s Signature,” but did not indicate that he was signing in his representative capacity as manager for EFW.  At trial, Lowery obtained a judgment against LaFrance personally, even though LaFrance intended that EFW assume the loan amount.

Because the loan included clear, definite, and unambiguous language, the Court of Appeals affirmed the trial court’s judgment and held LaFrance personally liable for repayment of the entire debt.

An individual executing a contract on behalf of an entity should always carefully read the agreement to ensure he/she is not agreeing to pay the debt of an entity, and properly document their capacity (i.e. signing as an officer) when executing the document.

By: Alex Adewunmi

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