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Signing a contract without indicating it's for your company can get you sued personally

Posted March 12th, 2008 by DCT
in

I just ran across a case from California where:

• a company executive signed a letter agreement, on his company's letterhead, but with no indication of his title;

• the company backed out of the deal;

• the other side sued both the company and the executive in his personal capacity; and

• the company's D&O insurance carrier successfully denied coverage, on grounds that D&O coverage doesn't include garden-variety breaches of contract; and

• the carrier therefore didn't have to pay for the executive's defense.

See August Entertainment, Inc. v. Philadelphia Indemnity Ins. Co., 146 Cal.App.4th 565 (2007).

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