By: Thomas S. Tripodianos Published: July 2015

Is Agent Bound in Contract Breach Action without Piercing Corporate Veil?

Question.        This claim arises from a written home repair agreement Agent entered into on behalf of Construction Co. Agent asserts he could not be held individually liable as he was an agent acting on behalf of a corporate entity. Is Agent bound in contract breach action without piercing corporate veil.

Answer. No.

Agent, who signed the contract on behalf of Construction Co., contends that he could not be held individually liable since he was an agent acting on behalf of a corporate entity.

A contract negotiated by an agent for a known principal does not become the contract of the agent simply because he signs his own name without taking the precaution to tell the other party to the contract that he is acting for his principal, which fact is already fully understood. Here, the record demonstrates that Homeowner, the party alleging personal liability on Agent's part, failed to offer clear and explicit evidence of Agent's intention to be personally bound by the contract particularly since the agreement, which was drafted on a letterhead containing Construction Co.'s name, provided that Construction Co. would perform the repairs. Thus, the plain language of the agreement established that Agent was acting as an agent for Construction Co. and, as an agent, Agent was not susceptible to personal liability without a piercing of the corporate veil.

Accordingly, the Agent is not personally bound.

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