QUESTION
Can you get out of a business contract if you signed the papers but your name is not on the business?
Asked on Oct 02nd, 2014 on Contracts - Nevada
More details to this question:
Hi. Ill try to keep this short. My wife and I own a nail salon. The salon is under her name. We haven't got a marriage license yet because we figured if the business fails she will take the hit and I have good credit so only one of us will be affected. I signed a contract for some advertisement a couple months ago. We need to get out of this contract because their advisement is not effective. But there is no cancellation in the contract. My question is since my name is not on the business and we are not married on paper would she be able to say that I was a manager who was unauthorized to make a decision like that. We want to change our bank info so they can no longer pull these fund out. What will happen if they do that? Will they go after me since I signed the contract? Technically im not connected to the business on paper so would it make a difference? Will they go after her? what is a loop hole to consider in this situation.
1 ANSWER
Would your wife be able to commit perjury? I guess so, but I wouldn't advise it. The penalties for that crime are a hell of a lot more severe than being stuck by a bad deal.
If you signed the contract on your own individual behalf, you are personally liable on it, regardless of whether you own the business. If I buy you a car, I'm liable on the car loan or lease, even though I'm not using the car. If you signed the contract on behalf of the business (assuming that it is an independent entity, like a corporation) or on behalf of your wife, it or she is liable on it. Even if you really didn't have actual authority to sign on its or her behalf, it appears from what you've written that you had apparent authority to do so. When a principal puts someone in a position so that it appears that that person has authority to act for the principal, a third party is entitled to rely on it. For example, if I leave you behind the cash register in my store, any customer walking in is entitled to rely on your authority to complete transactions, even if you change the prices of the merchandise and I didn't authorize you to do so. I can sue you for any loss, but I have no right to go after the customer.
The ad people will go after everybody they can, but if you signed as an agent for either the business or your wife, rather than in your individual capacity, you are not personally liable.
BTW, how can she be your wife if you don't have a marriage license?
Answered on Oct 03rd, 2014 at 8:40 AM