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Texas Restaurant Law

The Biggest Contract Mistake & How To Avoid It

Posted in Acquisitions, Alcohol, Commentary, Contracts, Corporate Entity, Franchises, Litigation, Negotiation, Recent Law Trends, Vendors


The ugly truth is that people make mistakes every day when they sign contracts for their companies. What’s worse is that many people don’t even realize that they are making a mistake.

This particular mistake can cost your company thousands of dollars in legal fees. This mistake can cost you personally in legal fees and damages, and it could potentially cost you your job as well. This blog post will help you avoid this common mistake.

What’s The Mistake?

The mistake is that people just sign their name to contracts when they sign a contract on behalf of their company.  For example, say that your name is John Smith and you work as a Vice President for ABC Company, LLC. You want to sign a copier lease for your company. Do you sign, “John Smith”? No.

Why Is This A Mistake?

This is a mistake because you have now potentially bound yourself to this copier lease, not ABC Company, LLC. Now, if ABC Company, LLC fails to pay on the lease, the copier company could sue you for the deficiency. Also, if the copier stops working, the copier company could claim that ABC Company, LLC is using it and/or broke it, when you were the only one who signed the contract.

In either situation, the company may have to hire counsel. If the mistake is bad enough, it could cost you your job or force you to hire your own attorney as well. So what should you do?

How To Avoid The Mistake – How You Should Sign Contracts

From now on, remember that there are three things that must be in every signature blank that you sign for your company. There should be (1) the name of the company, (2) a blank for you to sign, preferably with your name spelled out too, and (3) your position with the company. Do not sign any contract in the future without all three of these items.

This also applies to contracts that other people sign. Imagine that you just sold a big project for your company, and that you are in charge of getting the other side to sign. If they fail to sign the contract appropriately, it could be equally messy for you should problems arise thereafter.


The advice here applies to all contracts, large and small. It can protect you, personally, and it can protect your company from unnecessary liability.